Freedom of Religion and Belief
 - Question

Lord Suri: To ask Her Majesty’s Government what assessment they have made of the recommendations of the report of the All-Party Parliamentary Group on Freedom of Religion and Belief, Article 18: From Rhetoric to Reality.

Lord Ahmad of Wimbledon: My Lords, Her Majesty’s Government warmly welcome the report, which is well-informed and demonstrates the deep commitment of its authors. I wrote to the all-party parliamentary group on 8 December with an initial response to the recommendations, several of which have already been reflected in the Government’s approach to freedom of religion or belief. As we continue to push forward on this issue, we will continue to reflect on the recommendations made in this excellent report.

Lord Suri: I thank my noble friend the Minister for his response. He will know that the Government stated in their response to the APPG report that the stabilisation unit meets with religious and other key actors overseas to better understand FoRB. I am pleased the Government have expressed a desire to look for ways to strengthen this work. Can the Minister explain how information gathered in these meetings is currently being fed into government programming, and to government posts, to help better understand and tackle patterns of religious persecution? Can he also inform your Lordships’ House how he is tracking and assessing the responses from ambassadors and high commissioners to the letters he sent, which asked what they are doing to advance freedom of religion and belief?

Lord Ahmad of Wimbledon: I am pleased to inform my noble friend, and indeed the House in general, that there is very much cross-government co-ordination in this respect. I am delighted that, in our approach to the importance of focus on freedom of religion and belief, there is underlying support, by colleagues across DfID in particular, on ensuring that that essential element of our human rights provision is also understood across the world. On the specific issue of the different posts, I wrote to every post shortly after taking up the position of Minister for Human Rights, and in that regard we have had a positive response. Most recently, together with my right honourable friend Mark Field MP, the Minister for Asia, I wrote to each high commission and ambassador for the priority countries of Asia, and we have received very positive responses about the importance of prioritising freedom of religion and belief in our diplomatic efforts across the world.

Lord Collins of Highbury: My Lords, I declare an interest as a member of the APPG. I certainly support its work and its report, but religion is often used as a cover for oppressing other minorities, particular the LGBT community. A charity I am a patron of, an HIV centre in the East End of London, is working with faith groups on practical ways we can build respect and address concerns. Does the Foreign Office see the benefit of this sort of work, and is it supporting such work in other countries?

Lord Ahmad of Wimbledon: The noble Lord knows I agree with him totally. We have seen exactly those kind of initiatives working domestically, which are of great value. In discussions we have had—and he will be aware of this—I have often said that faith communities should approach all these issues, including those of LGBT rights, as defined human rights issues. When we look at these issues through the prism of religion, the issues of fairness, equality and justice should prevail.

Lord Singh of Wimbledon: My Lords, as a member of the APPG for Freedom of Religion or Belief, I fully support the need to look beyond rhetoric towards positive action to protect freedom of belief and human rights. Will the Minister agree that we urgently need to decouple the linking of trade with human rights? Only last September, the then Defence Secretary, Sir Michael Fallon, cautioned against criticising human rights abuses in Saudi Arabia because of the danger of losing contracts. Does the Minister agree with the Soviet human rights activist Andrei Sakharov, who said that we must always be even-handed in our pursuit of human rights?

Lord Ahmad of Wimbledon: I believe that is our approach. Through our diplomatic corps, to whom I pay great tribute, we are able to have both public but also, importantly, private and candid discussions with countries around the world on the importance of human rights and the equality of human rights. The other area of opportunity where I believe the UK can play a key role is that, as we build democratic institutions and countries look towards their constitutions, those constitutions must reflect equal human rights for all.

Baroness Brinton: My Lords, as a founding member of the APPG, I thank the Minister for his response to the report. Can he provide details about the £600,000-worth of projects funded by the Magna Carta fund which the Government have said have led directly to positive freedom of religion or belief outcomes in 20 countries? If they are so positive, what will the Government do to ensure that the principles behind those projects will be spread elsewhere?

Lord Ahmad of Wimbledon: First, through the Magna Carta fund we have been working in our priority countries to ensure that freedom of religion and belief is raised, not just directly but—a point made earlier by the noble Lord, Lord Collins—building and working with civil society organisations and human rights defenders within those countries to ensure that they have political, diplomatic and financial support. In further support of those objectives, I am delighted, as I said earlier,  that we are working hand in glove with our colleagues at DfID. There is an added fund now of £12 million which is targeted at development assistance but also ensuring that human rights, including freedom of religion or belief, are enshrined in our projects and support across the world.

Bishop of Durham: My Lords, noting recommendation 5, will Her Majesty’s Government provide detail about how DfID assesses its partners’ commitment to freedom of religion and belief when determining where the funding goes around the  world?

Lord Ahmad of Wimbledon: The right reverend Prelate is right to draw attention to the detail. I have written specifically on that point to the APPG. There are assessment criteria that colleagues at DfID apply. Those ensure that freedom of religion and belief, as well as other elements of the wider human rights agenda, as I said, are protected in the support that we provide.

Lord Polak: My Lords, can I bring us back home and welcome this week’s announcement by Sajid Javid that the Government will fund a new strand of the Lessons from Auschwitz programme in support of the Holocaust Educational Trust and the Union of Jewish Students to tackle anti-Semitism, prejudice and intolerance on campus? Does the Minister agree with me that it may be a welcome initiative if each political party—some more than others—would ensure that all future candidates be taken on such an educational visit before they enter Parliament?

Lord Ahmad of Wimbledon: My noble friend is quite right to raise the important issue of anti-Semitism. It is a scourge that we all despise, and it is important that we come together and raise our voices wherever we see religion being used to discriminate, be it anti-Semitism or Islamophobia—or any particular view or belief. On the specific point of Auschwitz, if I may provide a personal anecdote, I remember visiting Auschwitz with schoolchildren just before I took on my ministerial responsibilities at the Department for Communities and Local Government. As anyone who has been there knows, while we have heard about it and may have seen films about it, the first experience you have is chilling, and then you reflect on the importance of what is in front of you. I totally agree with my noble friend: it ensures that your mind becomes focused, that never means never, and that we never allow such a genocide to take place again.

Brexit: Trade Agreements
 - Question

Lord Wallace of Saltaire: To ask Her Majesty’s Government how they intend to avoid limitations on United Kingdom sovereignty in negotiating trade agreements with other states after the United Kingdom leaves the European Union.

Baroness Fairhead: My Lords, after leaving the EU, it will be the UK Government, not the EU, who will decide what trade agreements to pursue and what the contents of those agreements will be. Decisions on all future trade agreements will be made here in the UK, based on what is in the best interests of the UK.

Lord Wallace of Saltaire: My Lords, unless we go for unilateral free trade, I assume that trade agreements will be a bargain between the UK and others, in which we will have to make concessions, which will affect domestic law. Does the Minister recall that the Indian Government, for example, have made it clear that they would expect concessions on freedom of movement, which would affect British migration policy, in return for a trade agreement? Does she recall the US Commerce Secretary saying that he would expect the UK to move towards accepting US regulations, instead of EU regulations, in phytosanitary and other areas, in return for a trade agreement? Does she recall that the NAFTA trade agreement allows US multinationals to sue in foreign courts, and that Eli Lilly is currently suing in Canadian courts, demanding that Canada changes its domestic patent law? Are those not all incursions on sovereignty?

Baroness Fairhead: I thank the noble Lord for his question. What I can say is that, for the first time in 40 years, we will have the ability to operate an independent trade policy. We will be negotiating on behalf of the UK, in the interests of the UK. Clearly, any trade agreement is a negotiation between two parties, but we will always ensure that all parts of the UK are taken into account when we negotiate to benefit the UK as a whole. That is why we would undertake those trade agreements.

Lord Grocott: Will the Minister join me in warmly welcoming the concern of the noble Lord, Lord Wallace, about the importance of parliamentary sovereignty, and does she therefore look forward, as I certainly do, to receiving the noble Lord’s support when we deal with the Act that most significantly diminished British parliamentary sovereignty, namely, the 1972 European Communities Act?

Baroness Fairhead: We have made a decision as a country that we will leave the EU, and as part of that we will be leaving the jurisdiction of the European court. Clearly, what is of concern is that its rulings are binding on all national courts, including those of the UK, as we agreed. However, when entering into international agreements, no state has ever submitted to the direct jurisdiction of a court in which it does not have representation—and we have representation. When we have the ability to enter into new international agreements, our aim will be to make sure that we keep all our protections for the environment and human rights. Those protections are important, as we maintain those agreements.

Lord Garel-Jones: On the subject of parliamentary sovereignty, does my noble friend not agree with the Supreme Court that, while Parliament authorised the referendum and the Government are therefore right to pursue the discussions that they are pursuing, it is also the case, as the Supreme Court has ruled, that the outcome of those negotiations must be laid before Parliament for approval?

Baroness Fairhead: As my noble friend said, this is a matter that is still under discussion in the other place, and that is what is happening.

Lord Elystan-Morgan: Does the Minister not agree that the question from the noble Lord, Lord Wallace, appears to be misplaced, in that the most onerous trade agreement can never abrogate sovereignty?

Baroness Fairhead: I thank the noble Lord for his input. Yes, the ability of a country to regulate on its own behalf in the public interest is well recognised in international law. Therefore, we would expect to be able to continue to regulate in our national interest. In the terms of our agreements, that is what we will be achieving in our agreements—going for the UK’s best interests.

Baroness Hayter of Kentish Town: The EU trade deals have been underpinned by a commitment to human rights, to public health, to safe food and to fair trade, not just in the national interest but in the interest of fairness across the world. It has been leading on that. Can the Minister guarantee that none of these rights will be in jeopardy as we negotiate new trade deals with third countries?

Baroness Fairhead: I thank the noble Baroness for that input. It is true that, within the EU treaties, our trade agreements have been underpinned by really deep and enforceable environmental and human rights protections. There is an absolute commitment by the Government that those will be maintained as we go forward.

Lord Purvis of Tweed: My Lords, medicines, chemicals and aviation are a fundamental part of the British economy and will be key elements of any trade agreements going forward. Can the Minister confirm that it is the Government’s position to propose that those sectors will continue to be under EU regulation, rather than UK regulation? Any future trade agreements will therefore have to comply with EU regulations, over which the UK will not have a say, and those components will be under the ongoing auspices of the European Court of Justice.

Baroness Fairhead: I cannot give that assurance to the noble Lord, as it has not been agreed. What I can give an assurance on is that the UK has been at the very forefront of the highest standards for public safety and the environment, not just for the UK but, as the noble Baroness, Lady Hayter, said, for the world. We will continue that commitment because it is an absolutely critical part of the belief of, I think, all parts of this House.

Public Health: Strength and Balance Programme
 - Question

Lord Jordan: To ask Her Majesty’s Government whether they intend to provide local authorities with sufficient resources to enable them to provide universal access to the Strength and Balance Programme for adults over 65.

Lord O'Shaughnessy: My Lords, we are providing £16 billion to local authorities to spend on public health during the course of this Parliament. It is for local authorities to determine their spending priorities, reflecting the needs of their populations. The Chief Medical Officer recommends that adults undertake strength and balance activities on at least two days a week. Most local authorities provide opportunities for these activities within their falls prevention programmes.

Lord Jordan: I thank the Minister for his reply and declare an interest as deputy president of ROSPA. Will the Minister acknowledge that it is the failure to tackle adequately the chronic causes that means a quarter of a million elderly people attend accident and emergency each year with fall-related injuries, which makes an NHS crisis inevitable when seasonal illness strikes the same social group? To ease the unacceptable burden on A&E departments, will he urge the Government to give more tangible support to local authorities and to age-related and safety organisations whose work with elderly people, through what they call strength and balance exercise-based programmes, can and does significantly reduce the risk of injuries to those taking part?

Lord O'Shaughnessy: The noble Lord is quite right to point out the importance of preventing falls. Around 95% of hip fractures come about through falls, at particular cost and pain to the individual, of course, but also to the wider economy as a whole. I should point out that Public Health England supports a number of activities, one of which is a partnership with Sport England that has trained 5,000 health professionals in delivering physical activities, including strength and balance work. I agree that more needs to be done at local authority level, particularly as we have an ageing population, but there is good work going on at the local level.

Baroness Jolly: My Lords, in parts of Cornwall there has been real success with the strength and balance programme, with a huge reduction in falls. We all know that prevention is always better and cheaper than the cure. Can the Minister tell the House what work has been done to determine how much could be saved for the NHS as a result of a total rollout of this programme and why reductions to local authority public health budgets are jeopardising such programmes?

Lord O'Shaughnessy: I have not seen an extrapolation of the benefits the noble Baroness talks about but they would clearly be significant. There are a number of schemes going on at a local level, which it is important to point out. One of them, which we have discussed before, is the “Dance to Health” programme that started with six pilots two years ago. That is now a nationwide scheme across England and Wales. Local authorities should look at precisely that kind of activity. Public Health England is committed to making sure that local authorities understand the Chief Medical Officer’s targets, so that we see more of these programmes taking place.

Baroness Finlay of Llandaff: My Lords, I declare my interest as president of the Chartered Society of Physiotherapy. There is evidence that every £1 spent on physiotherapy can save £1.50 on the cost of a fall along the whole trajectory. There is also evidence that targeted, multifactorial risk assessment of people at particular risk can decrease falls by 60%. Therefore, will the Minister make sure that falls prevention is viewed across the whole of the NHS and not only delegated to local authorities and programmes outside, because that would miss some of the people who are at the highest risk of falls?

Lord O'Shaughnessy: I am grateful to the noble Baroness for pointing out the benefits of physiotherapy. She might be aware of a scheme in Middlesbrough that is providing for people who have fallen a precise pathway from physio into community activities involving strength and balance work. As ever, one of the challenges is to make sure that all local authorities know about such programmes and put them in place. They are not necessarily expensive, but they take a bit of time. I will make sure that Public Health England is taking that attitude of spreading good practice across the country.

Baroness Thornton: My Lords, NICE’s most recent and excellent quality statements in January 2017 offer guidance on falls and the importance of multifactorial risk assessments and interventions. These interventions require resources, particularly from social care specialists and public health workers, who we know are at the sharp end because of the financial pressure the Government have put on local authority funding and the successive reductions of public health budgets. Now that the Secretary of State has responsibility for social care, will he therefore ensure that strength and balance programmes are properly resourced? When will NICE next update its statistics on the uptake of guidance on this matter?

Lord O'Shaughnessy: I will write to the noble Baroness with specifics on the NICE guidelines, which are incredibly important because they establish best practice. Of course, it is then incumbent on professionals to follow that best practice. We know that public health budgets have been under pressure, but local authorities are still getting £16 billion over five years. That is a lot of money and they can use some of it to focus on such activities. Moreover, in the spring Budget last year, there were big increases in the social care budget,   which I know we all welcomed. That money is particularly focused on older people and preventing falls, which is what we want to see as part of that programme too.

Lord Elton: My Lords, the noble Lord, Lord Jordan, has raised a matter that is of close interest to a large number of noble Lords. I wonder whether it would be worth considering having access to the programme to which he refers in the Palace of Westminster.

Lord O'Shaughnessy: My noble friend makes an extremely good suggestion and I look forward to talking to him about that. Perhaps he could lead such a class.

Lord Lea of Crondall: My Lords, in addition to the suggestions that have been made, perhaps I could pass on a tip: playing tennis is quite good for this sort of thing.

Lord O'Shaughnessy: Indeed it is, as are other things such as yoga, tai chi and—believe it or not—carrying shopping bags.

Lord Kakkar: I declare my interest as chairman of University College London Partners. What assessment have the Government made of the provision of accountable care organisations to drive the integration across primary care, secondary care and social care to achieve the kinds of objectives that are the subject of this question?

Lord O'Shaughnessy: The noble Lord makes an incredibly important point. We know that we want an integrated health service, particularly as we have older people with comorbidities using a range of services. The five-year forward view—NHS England’s own strategy for the future—talks about how that integration will take place through what the noble Lord calls accountable care organisations or systems. We are moving ahead with these: indeed, the most recent Budget is providing significant capital to support that integration. This is the future of the NHS, and we all need to get behind it.

Transport for the North
 - Question

Lord Greaves: To ask Her Majesty's Government what support they are providing in relation to Transport for the North’s draft Strategic Transport Plan, published on 16 January.

Baroness Sugg: My Lords, Transport for the North’s draft strategic transport plan is an important step forward towards the north setting out its vision and priorities for transport with one voice. We have committed up to £260 million for TfN to establish itself as England’s first statutory sub-national transport body, to develop the business case for Northern Powerhouse Rail, and to implement smart ticketing across the north of England. We are providing substantial technical support at official level.

Lord Greaves: My Lords, the strategic transport plan for the north covers the whole of the north of England, and that is a good thing. However, it is based on the seven or eight largest cities in the north of England and has very little to say about what I would call the areas at the edges and the places in between, particularly smaller towns and rural areas. Does the Minister agree that if all the proposals that are put forward and implied in this document were to be carried out, the cost at today’s prices would certainly be more than £100 billion? Does the Government’s enthusiasm for this imply that their previous policy that such schemes were really considered only if they were in London or the south-east has now been changed?

Baroness Sugg: My Lords, I am not sure that that was the previous government policy. The strategy which has been set out is out for consultation, and Transport for the North will be speaking to people across the north to develop and finalise it. We will see the final plan in the summer and respond to it then. On the noble Lord’s point about it focusing on specific cities, it actually suggests strategic development corridors that cover the whole of the north and the central Pennines area, which I know will interest the noble Lord. I encourage everybody to contribute to that consultation.

Lord Geddes: Will my noble friend update the House on the progress being made on the improvements to the A1 between Newcastle and Berwick?

Baroness Sugg: My Lords, the strategic road between London and Newcastle will be upgraded to a full motorway by the end of the year, but I am aware that there are still issues north of Newcastle on the way up to Scotland. As I mentioned before, one of the strategic development corridors includes the east coast of Scotland and will be looking at exactly this project. I am aware that it may be some months before we see the final plan, and I will certainly see if we can take action quicker.

Lord Blunkett: My Lords, I have no intention of storming out of your Lordships’ House, but I share my noble friend Lord Prescott’s concern that strategic plans that have no chance of being implemented mislead people in the north of England into believing that something is about to happen. If the linked rail and road across the Pennines linking Hull, Sheffield, Leeds, Bradford and Newcastle is to become a reality, it will take real government investment. Will the Minister speak to the beleaguered Transport Secretary about turning mythology into reality?

Baroness Sugg: I am grateful to the noble Lord for his continued presence, unlike the noble Lord, Lord Prescott, who was not able to stay for the full launch of the plan. We have worked carefully with people from across the north on ensuring that we get the right balance of powers here, and we are looking forward to seeing the plan. The Secretary of State has ultimate accountability to Parliament, and with his statutory role, it is right that he makes the final decisions. We will be considering that project carefully, and we will be ready to make the investment.

Lord Whitby: My Lords, the Midlands is the largest economic area outside London. It attracts more inward investment and creates more start-up businesses than anywhere in the United Kingdom outside the capital. Its companies export to 178 countries worldwide, and it is still the only region in the United Kingdom with a trading surplus with China. In order to capitalise on and build on this robust achievement and complement the Government’s growth agenda, will Minister say whether Midlands Connect can benefit from devolution arrangements similar to those of Transport for the North?

Baroness Sugg: Yes, my Lords. We fully intend to create more statutory transport bodies, and I welcome the work of Midlands Connect in bringing together local authorities and partners, including Highways England, HS2 and Network Rail. My noble friend rightly points out the potential of the Midlands. We look forward to seeing the proposal for Midlands Connect, and we hope that it will become England’s second statutory transport body.

Lord Shutt of Greetland: My Lords, this document is very ambitious and there are some very expensive proposals. However, within it, Transport for the North talks about some of the precursors, including the Great North Rail Project—the trans-Pennine route upgrade—and indicates that it would like to see a firm commitment about that upgrade and electrification in early 2018. That is where we have now arrived. Can the Minister give that commitment?

Baroness Sugg: My Lords, we are absolutely committed to improving journeys on the trans-Pennine route, bringing in the state-of-the-art trains, longer carriages and more frequent services that the passengers would like. We want to go further and are planning to spend £3 billion to upgrade the key routes between Manchester, Leeds and York to give passengers those better, faster and more reliable journeys.

Lord Tunnicliffe: My Lords, I thank the noble Lord, Lord Greaves, for this Question because it has caused me to look at the document. You have to get to page 86 before it says anything about money:
“TfN’s status as a pan-regional organisation, with a range of stakeholders but limited fiscal powers, means that a bespoke but credible funding and financing framework will be required. A substantial element of funding will come from central Government budgets.”
Is the Secretary of State going to buy into this plan and that substantial element of funding?

Baroness Sugg: My Lords, absolutely—we are waiting to see the final plan which we will then of course consider. If the initial funding settlement for TfN does not include the funding for transport projects, it will be allocated separately from central government funds.

European Union (Withdrawal) Bill
 - First Reading

The Bill was brought from the Commons, read a first time and ordered to be printed.

Business of the House
 - Timing of Debates

Moved by Baroness Evans of Bowes Park
That the debate on the Motion in the name of Lord Ashdown of Norton-sub-Hamdon set down for today shall be limited to three hours and that in the name of Lord Teverson to two hours.
Motion agreed.

United States: Foreign Policy
 - Motion to Take Note

Moved by Lord Ashdown of Norton-sub-Hamdon
That this House takes note of the effect of the foreign policy of the United States of America on inter-state relationships around the world, particularly in the light of the United Kingdom’s changing relationships with other European countries.

Lord Ashdown of Norton-sub-Hamdon: My Lords, I will wait for noble Lords to perform the usual exodus. My noble friend Lord Campbell of Pittenweem has just said, “What we want is genesis, not exodus”—which may well be correct.
I am privileged to lead this debate. For reasons that I will not bother the House with, I have been spending a lot of time recently doing some research into the 1930s. I am struck—actually, horrified—by the similarities between our suddenly turbulent and unpredictable age and those years. Then as now, nationalism and protectionism were on the rise; democracy seemed to have failed; people hungered for the government of great men; and those who suffered most from economic pain felt alienated and turned towards simplistic solutions and strident voices. Public institutions, conventional politics and the old establishments were everywhere mistrusted and disbelieved. Compromise was out of fashion; the centre collapsed in favour of extremes; the normal order of things did not function; change and even revolution was more appealing than the status quo; and fake news—built around the effective lie—carried more weight in public discourse than rational arguments and provable facts. Painting a lie on the side of a bus and driving it around the country would have seemed very normal in those days, too.
Perhaps the last time that we stood as close to large-scale conflict as we stand now in the world was at the height of the Cold War—but then we had a comfort which I fear we do not enjoy today. Then, the western liberal democracies stood together in defence of our interests and our shared values. Now it pains me to say that, under President Trump, the most powerful of our number thinks that standing together is less important than going it alone, that the abdication of leadership and responsibility is preferable to engaging in the international space and that collective action takes second place to “America First”.
Throughout the long years of the American century we have taken great comfort in the fact that our alliance with the United States and its Presidents has  been built not just on shared interests but on shared values. Today we have to face the wrenching reality that this US President seems not to share our values; his recent racist comments have shockingly illuminated that fact. The liberal principles that have underpinned every civilised age, every peaceful period and every prosperous society are now under attack as never before, but President Trump appears more aligned with those forces ranged against liberal values than with those seeking to defend them. Throughout the American century we have taken comfort in the fact that the leader of the western world, although flawed like the rest of us, was well informed, judicious and cautious about going to war. Now I fear that we have an American President who seems all too frequently ignorant of the facts, unpredictable, foolhardy and reckless. Bang goes my invitation to the state dinner.
This is frightening stuff for those who, like me, place their faith in the Atlantic alliance. So what do we do about it? For the moment I fear that the answer is to grin and bear it in the hope that the US will find its way back to sanity. After all, we in Britain are not entirely free of this kind of lurch into stupidity ourselves. When the battle between the America that we know and love and Donald Trump ends, I think only one side will remain standing: either Donald Trump will destroy American democracy as we know it or American democracy will destroy Donald Trump. Personally, my money remains on the strength of that old and deep democracy.
However, even if on both sides of the Atlantic we can find our way back to saner and safer ground, is there something deeper going on here? The slow divergence of interests between Europe and the US does not date from President Trump’s election, although that has undoubtedly accelerated the process. Even under President Obama the US’s gaze was arguably looking more west across the Pacific than east across the Atlantic. I have no doubt that NATO and the Atlantic axis will remain Europe’s most important alliance for as far ahead as we can see, but it will not be the same alliance as it has been for these last 50 years. To remain strong, in my view, the Atlantic relationship will have to look far more like JF Kennedy’s 1962 vision of a twin-pillar NATO than the present conjunction of a giant on one side and 21 pygmies on the other.
We will need a NATO that is mature enough to cope with areas where our interests do not perfectly elide. We should not be shy, for example, of calling out Israel for its illegal occupations just because Washington chooses not to, or of strenuously supporting the Iran nuclear deal just because Mr Trump wants to wreck it. I have no doubt that the United States will remain the world’s most powerful nation for the next decade or more, but the context in which she holds her power has now totally changed. The American century was one of the few periods in history when the world was monopolar and dominated by a single colossus—when all the compasses had to point to Washington to define their position for or against. Now we are moving into a multipolar world, more like Europe in the 19th century than the last decades of the 20th. A foreign policy for the next 50 years based on what we have done for the  last 50 will be a foreign policy clumsily out of tune with the times—which I think is exactly where we currently are.
Everything has changed in the world—except, it sometimes seems, Britain’s view of it. British foreign policy in the post-Trump era will have to be much more flexible, much more subtle and much more capable of building relationships on shared interests—even with those beyond the Atlantic club, and even with those with whom we do not necessarily share values—than the simplicities of the last decades, when we only needed to snuggle close to our friendly neighbourhood superpower to be safe and powerful.
In a world dominated by a single superpower, might—not, unhappily, diplomacy—is the determiner of outcomes. So our present foreign policy is dominated not by diplomacy but by the use of high explosive. See a problem in the world, drop a bomb on it: that is what our policy has been. The string of western defeats in Iraq, Afghanistan, Libya and, most humiliating of all, Syria should tell us that this age is over. We have lost contact with the essential truth of Clausewitz that war is an extension of diplomacy by other means. We have remembered the war but we have forgotten the diplomacy—and so we have failed.
In an age when building alliances will protect and enhance Britain’s interests better than using military capacity alone, high explosive will, I believe, be less useful to us than effective diplomacy. To be diminishing our diplomatic capacity, as we are currently doing, is folly of a very high order.
Perhaps the most dangerous aspect of the current slide towards isolationism is that, in an increasingly interconnected and interdependent world, the only solutions to our problems are multinational ones. Climate change, trade imbalance, resource depletion, population growth, nuclear proliferation, overpopulation, poverty, migration and conflict suppression are the greatest problems we face—and not one of them can be solved by nations acting alone. As a medium-sized nation with global reach but, sadly, diminishing weight, it is in our interests to see a rules-based world order rather than one shaped by might. So actively pursuing the strengthening of multilateral institutions seems to me a necessary cardinal principle of a sensible British foreign policy.
Lastly, we have to deal with the consequences of our own folly. I make no secret of it: we Lib Dems seek to reverse Brexit, which has already resulted in a catastrophic shrinkage of our ability to protect our interests abroad. I reject the notion that in seeking to reverse Brexit we are acting either undemocratically or unpatriotically—any more than, for instance, the noble Lord, Lord Forsyth, who I recognise as a true democrat and a patriot, was acting in contravention of either of those principles by constantly and determinedly seeking to change the country’s mind after the 1975 referendum. But one thing is certain: whether we are in the EU or out, our foreign policy must continue to place its first emphasis on working intimately with our European neighbours because that is the best way—indeed, the only way—to pursue our nation’s interests in a dangerous, volatile and turbulent age.
It is too little recognised just how much the terms of our existence as Europeans have changed over the last two decades. Europe now faces an isolationist US President to our west, the most aggressive Russian President of recent times to our east, and, all around us, economic powers now growing up, some already stronger than any single European nation. The right reaction to this new context of our existence is not to allow ourselves to be broken up and scattered, but to deepen European co-operation and co-ordination. This way only does our country’s best interest lie. So, inside the single market and customs union or out, inside the EU or separated from it, our only sensible foreign policy is to proceed in lock-step with our European partners.
I can put it no better than the Government’s own paper on post-Brexit foreign policy. Britain’s future relationship with the EU should be,
“unprecedented in its breadth, taking in cooperation on foreign policy, defence and security, and development”.
Precisely, my Lords. The question we debate today is: do the Government mean that, or will the country’s interests once again be hijacked by the anti-European prejudices of the Tory party? I beg to move.

Lord Howell of Guildford: My Lords, I thank the noble Lord, Lord Ashdown, for promoting this Motion and debate. I do not disagree with some of his concerns; in fact, I agree with some but certainly not all of them. I disagree particularly with the weight that he places on 20th-century blocs and alliances in this completely different age. That is charmingly out of date and old-fashioned but I understand it.
Whenever we discuss the special relationship and relations with the United States, we tend to hear two mantras constantly repeated. The first is that America remains the superpower leader of the free world, and the second is that the US President, Donald Trump, is the most powerful man in the world. I question both those statements in modern conditions. I dispute the first proposition because, although America is a great nation, a good friend and ally and the world’s most powerful economy by far, it has painfully discovered that it can no longer get its way in the reordering of the world. Indeed, that is confirmed by the recent studies by the Pentagon authorities, who fully recognise that America’s role has changed and that it is in a new era of what the authors call America’s “post-primacy”. In a world of networks, the whole concept of a superpower dominating the world has to be radically revised. I doubt the second proposition about Donald Trump because, as we now clearly see, his powers are limited both by internal US constitutional restraints and by forces larger than the USA itself, or, indeed, any one country, and much more complex. America clearly no longer gets its way merely by virtue of its colossal defence spending, and in these conditions there is no decisive victory to be secured, no real army to be defeated—the noble Lord, Lord Ashdown, is right about that—and no definite end to a conflict. The battle ceases to be primarily on the battlefield; it becomes a matter of narrative and persuasion, of winning the story as well as of outright military operations.
That raises two issues. First, technology has greatly empowered the Davids against the Goliaths. Lethal weaponry can now be procured with ease and at low cost, which can put power into the hands of the smallest and often most invisible group or operating military cell or tribe. American foreign policy experts have just not fully understood that size no longer wins in the network world. Secondly, it needs to be the right kind of defence spending that actually wins friends and defends, by securing peace and stability rather than just by making enemies. What the Army calls non-kinetic means of winning become the most vital aspects of national defences. The basic point is that sheer overwhelming force is no longer the decisive factor, as vividly demonstrated, as we all know, in Afghanistan, Iraq and Syria, and possibly over North Korea. America can no more “win” on its own, despite its colossal arsenal, than we can.
As for Donald Trump, while I make no excuses for his very uncouth undiplomatic language, there are two reasons not to write off his presidency so soon. His bark is plainly much worse than his bite. The first reason is that within the American domestic context he is finding it very hard to get his way. On issue after issue he has been defeated. But secondly, and more important from our position in the UK, it is obvious that on the international stage his scope and space are highly limited, partly for the reasons already mentioned and partly because there are now global forces at work which are much larger and much more powerful than even the great USA itself. By “larger forces” I mean the rising power of Asia—China in particular, but not just China—which now produces the bulk of the world’s GNP outside the OECD. I mean the remorseless growth of new networks cutting across the old rules of sovereign states and severely limiting, indeed cancelling out, the role of the superpowers of the last century, whether we are referring to China or the United States, ensuring that the rhetoric of “America first” simply does not work in practice. It is not quite a post-western or a post-Atlantic world, but it is one in which power is shared with the Indian Ocean and the Pacific arenas.
These dramatically changed circumstances colour our relationship with the United States in entirely new ways. It is still special, in that we share many common values and have obvious affinities based on history and culture, but it is quite different from the relationships of the past. America is our partner in the new age, but not our boss. We do not need to be—in fact, must not become—its obedient poodle, let alone its gun dog. The phrase “solid not slavish” was used by my noble friend Lord Hague when he summed it up a while ago, and it remains an entirely apposite and concise description of what the relationship should be. The network is a great equaliser of nations and people, and it is healthy to escape from our overdependency on America. To put the matter colloquially, in the age of hyperconnectivity and soft power, we have other fish to fry.

Lord Robertson of Port Ellen: My Lords, it is very difficult to say something positive about President Donald Trump. I am going to stretch the patience and  maybe the credulity of the House and try to do so. As he has rampaged across the world, he has done something valuable, even if he has done it unconsciously. With his attacks on the American press, he has alerted all of us to the value and importance in our society of a free and vibrant media. With his partisan attacks on “so-called” judges, he has underlined across the world that free societies are based on the rule of law. When he equates neo-Nazis with anti-Nazi demonstrators, he has highlighted to the rest of us that racialism and anti-Semitism are a cancer in a civilised society. When he attacks allies for being dependencies and questions the value of NATO, he stirs the memory of how NATO saved our continent from Stalin and ended the violence in the Balkans. When he sneers about fake news, he reminds decent people that there is only the truth and not what he calls “alternative facts”. And when he attacks diplomacy, internationalism and co-operation between nations, and he slashes the budget and personnel of America’s Foreign Service and the UN, we in contrast can see that this complex, dangerous and interdependent world needs diplomacy.
He may not realise it and he may never have intended it, but Donald Trump may yet have revived and reinforced among thinking people globally that there is a better alternative to the shouty, incoherent ravings of a very temporary American President. In doing so, he will have done us all a service.
Beyond President Trump, in this country we need to face up to a very uncertain future. The Defence Secretary on Monday in the Commons outlined the grave threats that we face, when he said there were “four principal threats” to our country and the fourth one is,
“the erosion of the rules-based international order”.—[Official Report, Commons, 15/1/18; col. 611.]
I believe what he said; I agree with him. You might normally expect me to now advocate an increase in our defence budget, and I do, but I also want to make the case for diplomacy and an end to the vandalism of our national interest that is represented by the degrading of the Foreign Office and its budget. Our military is after all the last line of our nation’s defence, not the first. The military is there to reinforce and stiffen diplomacy and then robustly to act when diplomacy fails, but hard power without soft power is a recipe for constant conflict not enduring peace.
Consider this. The whole budget for the Foreign Office in 2017-18 will be £1.2 billion. Strip out cross-Whitehall funds and non-discretionary funding like subscriptions to the UN and NATO, and it is down to £900 million a year. That whole year’s budget is less than the United States is spending on its new London embassy alone. That is £900 million to run the whole diplomatic effort—in 168 countries and territories and nine multinational organisations. In contrast to that, the National Health Service spends £2,000 million a week in this country. The global staff of the Foreign Office has been reduced by 20% in the last decade. In contrast, the staff of the United States of America in the UK alone represents one-third of the total global staffing of the Foreign Office.
In a world with multiple threats to our safety and security and with the complexity of Brexit determining our long-term future prosperity, this savage amputation  of our international diplomatic capacity is frighteningly short-sighted and self-harming. In our Diplomatic Service we invest in the protection and the projection of our national interest. We in this country have other powerful instruments of soft power too: the BBC World Service, the British Council, the Westminster Foundation for Democracy and even—I declare an interest as vice-chairman—the internationally acclaimed Royal Edinburgh Military Tattoo. It is time we abandoned the wrecking-ball approach of the Trumpian world and reinforced, not slashed, that diplomatic first line of defence.

Lord Campbell of Pittenweem: My Lords, in our current discussions about what is sometimes called the special relationship, it is inevitable that the character and personality of the current President will be a dominant feature. There are two temptingly polarised alternatives: the President is an unpredictable maverick and he will test the relationship to its destruction; alternatively, Trump is but a blip, the new President will repair the damage and normal service will be resumed. My case is that neither of these is tenable. There has never been an unsullied golden age in the relationship between the United Kingdom and the United States. It is true that when the personal relationships between President and Prime Minister have been strong, greater influence has perhaps been available from this side of the Atlantic. But if we remember the closeness of Thatcher and Reagan, it is also true that that did not stand in the way of the illegal invasion of Grenada by the United States.
From the point of view of the United States, the relationship is one of choice, but for the United Kingdom it has been one of necessity. The post-war decline of the United Kingdom, the end of empire and the expression that we had lost an empire but not found a role meant that we had to look elsewhere. What better role than to be close to the most powerful nation in the world? That closeness brought rewards. It brought the Marshall plan and Polaris, after Harold Macmillan went to meet President Kennedy, and of course it still allows us access to the Trident system. Things had to be given in return; the noble Lord, Lord Robertson, will remember that there was a very large American ship in the Holy Loch, and there were those who challenged that. However, it was a necessary part of our bargain.
For the United States it has been a question of choice and its wish to have a close ally in Europe as European co-operation post-war both economically and—yes—politically began to emerge. It is notable that in the 1960s President Kennedy supported Britain’s attempts at membership of the European Economic Community. To some extent, that long-standing policy was echoed by the intervention of President Obama in our debate about whether we should stay in or leave the European Union. Why was this so? It was because the United States wanted one country that could be relied on to put the American case in Europe. It is quite legitimate. It never made any secret of its motive and the truth is, to coin a phrase, we rather enjoyed being the voice of America.
What difference does Trump make to this? Ill informed or incoherent as he may be, his clear objective is to further American interests by any means possible—a kind of civilian equivalent of hybrid warfare. It may not be the language of the Ivy League or of the Washington habitué. Diplomatic or domestic conventions may easily be disregarded. This is a man with a transactional approach, with short-term rather than long-term goals.
Yes, we will continue to be important to the United States—sharing intelligence and the nuclear burden of NATO, and even perhaps in the Security Council, although recent positions taken by the United States will make that yet more difficult. None of this will arrest the pivot—not President Trump’s expression but Hillary Clinton’s, when Secretary of State—towards the Pacific. President Trump is a competitor, not a conciliator, and heaven knows there is plenty of competition to be found between China and North Korea.
We will tolerate the boorishness. We will tolerate the unpredictability out of necessity, not least when seeking a trade deal with the United States. Who believes that the offer of the President will be anything other than an attempt to secure the interests of his core support across the United States? We will inevitably lose influence with the United States, just as I believe our efforts—which may be successful—to leave the European Union mean that we will be leaving influence in Europe. This is an unhappy coincidence.

Lord Ricketts: My Lords, I, too, thank the noble Lord, Lord Ashdown, for the opportunity to reflect on the geopolitical changes that are sweeping our world and what we will face as we emerge, blinking, from our 40-year membership of the European Union into that world. I agree that there are more simultaneous crises going on now than I can remember through my career. It is striking that the Syria crisis must be the first in the Middle East since the Second World War where neither the US nor the UK has been playing a key and shaping role.
The underlying trend, which I think has already begun to come out in your Lordships’ debate, is the erosion of the international security structure that Britain was so instrumental in putting together in the late 1940s. That is partly because of the US retreat from leadership of global crisis management. It started before President Trump and has many reasons—some of them lie in that grinding and difficult 10 years of international conflict that the US and UK went through in the first decade of this century. Clearly, President Trump’s dislike of multinational organisations and his preference for transactional bilateral deals is exacerbating that trend, but there are other factors too, most obviously economic ones. There is the move of economic power towards Asia and the rise of countries with nationalist leaders impatient with the constraints of the post-war institutions who want to dominate in their region—countries such as Russia, China, Turkey and perhaps Saudi Arabia as well.
In parts of the world, I think we are returning to a period of spheres of influence, which is a very uncomfortable world for many countries. The question  for us is what should Britain do in that context, as we leave the EU. For me, it means putting much more energy into an active, engaged, initiative-taking foreign policy. As one of a number of former heads of the Foreign Office here today, noble Lords would expect me to support the eloquent appeal of the noble Lord, Lord Robertson, for a properly resourced Foreign Office. If global Britain is going to mean anything and if bilateral relationships with our friends and allies will have to take greater weight after Brexit, we clearly need a Foreign Office with the resources to do the job. The current balance between the money spent on international development, defence, intelligence and foreign policy seems to me to be way out of kilter.
I have two thoughts. First, we must make the most of the multilateral organisations of which we will still be a leading member. I particularly think of NATO. It is very welcome that British troops are now deployed in eastern Europe in support of our Article 5 commitment to NATO. Britain should naturally be looking to play a leading role in NATO.
But I also want to draw attention to our strategic relationship with France on the day that President Macron is here for an important summit meeting. It is an opportunity to remind ourselves that Britain and France are natural allies. We are the two European nuclear weapon powers. We have the largest defence budgets in Europe and we have Armed Forces who are trained, equipped and experienced to go out and undertake real combat in the real world. We have the two most significant defence industries in Europe. It is vital that we now put new energy back into the Lancaster House process that I played a small part in launching in 2010, both to use the capacity that we built for the two Armed Forces to work together and to drive forward defence industrial co-operation, including the potentially very important unmanned combat air system of the future. It is also time that we revisited our consultations with the French on nuclear deterrence. The factors affecting nuclear deterrence in the world, not least the emergence of a potentially nuclear-armed North Korea, make it important that the two European nuclear powers should be giving leadership in NATO on nuclear deterrence as well.
In the circumstances described by the noble Lord, Lord Ashdown, let us double down on our strategic relationship with France and let us also remember that our relationship with the United States, whatever the difficulties with the current President, remains absolutely essential in the fields of defence and intelligence, which I saw at first hand. They will continue. We need to show that we are relevant allies to the US, including in what is happening in Asia, but let us now invest seriously in our key strategic bilateral partnership.

Lord Lamont of Lerwick: My Lords, I first refer to my entry in the register of interests as a consultant to a number of companies in the Middle East and also to my role as the Government’s trade envoy to Iran. I thank the noble Lord, Lord Ashdown, for introducing this debate. I agree with him on two particular points. One was the emphasis on diplomacy in tackling problems, and he may be surprised that I  agree with him on the second point. In or out of the EU, on many issues we have to co-ordinate our policy with Europe, and the Government should develop a deep partnership.
I was slightly hesitant about speaking in this debate because I was worried that it would develop into an anti-Trump bandwagon. Although I share many criticisms of President Trump we have to accept and respect that he is the President of the United States, and not everything single thing that he has done has been wrong. None the less, I want to concentrate on one issue relating to the United States policy that is wrong, which is its policy towards Iran.
I was in Tehran last week with Jack Straw and Sir Peter Westmacott, our former ambassador to the United States. Naturally, we raised the cases of the dual citizens: Nazanin Zaghari-Ratcliffe and Mr Foroughi. We also expressed concern about the riots and what was happening there and told them the world would be watching. My view, and it has been my view for a long time, is that, with Iran, we need a policy of critical engagement. Engagement—but critical—because, although it is in many ways an authoritarian country, to my mind it is one with a capacity to change and is much more open than many of the other countries with which we are closely allied in the neighbourhood.
On the issue of riots in Tehran, there are of course many interpretations. One thing that struck me particularly while I was there was the reaction of President Rouhani. He not only defended the rights of the demonstrators to demonstrate; he went further. He said this is an opportunity for us to listen and to learn. He went even further than that and said that this is not just about economics, it is about freedom. Lastly, just the day before I left, he said that the young in his country have a completely different view of the future, and they cannot go on imposing their way of life on them. President Rouhani renewed his commitment to honour his election promises about more freedom and more economic benefit.
My view is that the best way to help those who were demonstrating and felt compelled to riot is to make sure that we make the nuclear agreement effective and give the Iranians some benefit from the agreement. President Trump has indicated that he wants to tear it up and that he thinks Iran is not complying with the agreement, despite the fact the International Atomic Energy Agency has issued 10 reports indicating that Iran is 100% compliant. His own State Department does not agree with him. I do not think the CIA agrees with him. No European Government agrees with him. None the less, he has indicated that, although he has signed the waiver on sanctions this time, in another 90 days he will not do it again. If that is to happen, it will make the agreement really ineffective. It will be extremely difficult for Europe to carry on on its own, and I would like the Minister to comment on one point.
I gather there was a meeting between Mr Zarif and EU Foreign Ministers a few days ago in which there was discussion of whether Europe could isolate itself from American sanctions by some legal mechanism, rather similar to what Mrs Thatcher did with sanctions  against Libya in the 1980s and sanctions against Russia. We took action then, so could we not take action again? If America retains some sanctions it is very difficult for EU banks to make trade at all possible.
From an Iranian point of view, there is this huge feeling of betrayal. The noble Lord, Lord Ashdown, put the emphasis on diplomacy. Henry Kissinger once said that we want Iran to be less of a revolutionary cause and to become more of a normal state. It will only be able to do that if it actually feels that diplomacy pays and that agreements are honoured. If that agreement is simply torn up it will be the worst possible signal towards Iran. We need Iranian involvement in dealing with the crises in Yemen and in Syria, and we want the Iranians to feel that diplomacy is necessary to reaching a solution in those areas. Even after we have left the EU, I hope that the Britain’s cooperation within the EU3 will continue because such diplomacy, in coordination with our European partners, is extremely important. We should not simply follow the United States on this issue because on this, I am sorry to say, it is profoundly wrong.

Lord McNally: My Lords—

Lord Browne of Ladyton: My Lords—

Lord McNally: Oh, I do apologise.

Lord Browne of Ladyton: My Lords, in an interview with the New York Times, the then presidential candidate Donald Trump—not spontaneously but prompted by his interviewer—said that his foreign policy boiled down to two words: America first. Later, he explained that this meant that his Administration would prevent other nations from taking advantage of the United States and at the start of his presidency he promised to radically reform America’s trade policy, to demand more of allies and to do less in the world. One year on and his promises, among other things, have resulted in calls to renegotiate NAFTA, to withdraw from the TPP, to recognise Jerusalem as Israel’s capital and to leave the Paris climate accord.
This is all at a time when the liberal international order is under great pressure from revisionist states, there is turmoil in the Middle East, as well as North Korea’s nuclear ambitions and the aftershocks of the global financial crisis. It is a time when, in addition to an erratic US President, Europe faces major foreign policy challenges: a revanchist Russian President; a western Balkans rejecting the settlement reached at the end of the Yugoslav wars; a Turkish President lashing out at Greece, the Netherlands, and Bulgaria; and a destroyed Iraq and Libya and a half-destroyed Syria, all exporting refugees, including jihadists, to destabilise already fearful European communities. It is a time when every European foreign ministry has had to divert resources to produce dossiers to feed the European Commission’s Brexit negotiating process and when Brexit is dominating the UK’s political and policy agenda, already putting huge strains on the country’s Civil Service. As a result, the UK’s foreign policy capacity and attention span is and will be constrained, and its priorities will be shaped by the  Brexit agenda. I fear that any UK contribution to European foreign policy after Brexit is going to be even weaker and more limited than in recent years.
I am grateful for the opportunity of this debate, coming less than a week after President Trump gave us and other European allies a 120-day ultimatum to come up with a new deal addressing his Iran concerns or the US will pull out of the 2015 JCPOA nuclear agreement. His plan overtly involves bullying us and other allies into fundamentally changing the terms of a deal that we and the US know is working and which we have publicly stated we have no intention to amend. Further, we believe that keeping the JCPOA in place is the only way to make future negotiations on other Iranian activities possible at all and that a US withdrawal would undermine the transatlantic relationship and our alliances, which are mutually vital across a broad range of policies from trade to terrorism. The final words of the President’s statement showcase the challenge we face, and are worth reading and rereading:
“I hereby call on key European countries to join with the United States in fixing significant flaws in the deal … If other nations fail to act during this time, I will terminate our deal with Iran.
And listen to this:
“Those who, for whatever reason, choose not to work with us will be siding with the Iranian regime’s nuclear ambitions, and against the people of Iran and the peaceful nations of the world”.
I recognise that last Thursday at a meeting in Brussels, the Foreign Secretary, Boris Johnson, the Foreign Ministers of France and Germany and the EU High Representative, Federica Mogherini, the European signatories to the deal, insisted, having met Mr Zarif, that Iran was respecting the agreement and that it is essential for international security. At the same time, Sir Adam Thomson, director of the European Leadership Network, led a delegation of very senior non-governmental Europeans to Washington DC to engage the US Senate on the Iran nuclear deal. In his draft report, which I have seen and which will be published, he states that the delegation was,
“received and heard with courtesy and attention. They believe their weight, seriousness and arguments resonated privately with US interlocutors. Interlocutors on Capitol Hill asked the ELN to continue to feed in European arguments and material”.
Entirely coincidentally, at the invitation of the Centre for a New American Security, I, along with Ambassador Lose, the Danish ambassador to the US, spent part of last week in Salt Lake City, Utah, engaging in discussions and debates with residents of the city on various aspects of the transatlantic relationship. CNAS launched this initiative because of mounting evidence of a divergence between Washington and the rest of the US on issues of foreign policy and trade, and because survey data show that Americans and Europeans are losing sight of the value of the transatlantic relationship and what each side gains by committing itself to it.
To my astonishment, I found in Utah—a “red state” which could hardly be further from DC—an informed and interested range of audiences of all ages, receptive to the message of the value of transatlantic co-operation. There was no “America first” for these people. To me, the lesson of this snapshot, which is all I have time for in five minutes, is one of leadership and engagement. The US is correct to encourage Europe to take more responsibility for its security and destiny.  My observations and experience of the last week confirm my prejudice that when we do, in solidarity, we are at our most effective. But I fear that we just do not do so enough.

Lord McNally: My Lords, I had better start by saying that I thought that that was an excellent speech and I apologise to the noble Lord, Lord Browne, for trying to deprive the House of it. I congratulate the noble Lord, Lord Ashdown, on bringing this topic before us and I agree with the noble Lord, Lord Lamont, that the tone of the debate has been well set.
Early in March 1974, I was in the back of a limousine, returning from Foggy Bottom to the British Embassy with the new British Foreign Secretary, James Callaghan, who had just had his first meeting with Henry Kissinger. I was a 31-year-old, very enthusiastic political secretary—we did not call ourselves spads in those days. I was enthusing to Mr Callaghan about just how well the meeting had gone and how well he had got on with Dr Kissinger. Mr Callaghan leaned back and said, “Tom, it is part of the job description of a British Foreign Secretary to get on with the American Secretary of State”. That is perfectly true—it is a priority that the British Foreign Secretary should have to this day, and I hope he has.
Over the last 40 years, Britain has had a unique foundation for its foreign policy as the only country with membership of the UN Security Council, NATO, the Commonwealth and the EU. These interlocking relationships have given us a unique combination of hard and soft power. We have also had, as the noble Lord, Lord Robertson, referred to, the BBC World Service, an instrument of soft power underpinned by its expertise and integrity.
The idea that our departure from Europe gives us an opportunity for some new global role is fantasyland. To proffer the Commonwealth as a practical alternative to the European single market is a delusion. The Commonwealth is a tremendous example of our soft power but it is not, and never can be, an alternative trading bloc. Every Commonwealth country has its own regional trading commitments and will rank its relations with those trading commitments, and with the EU, above any bilateral trading arrangements with the UK.
Let us look forward to the Commonwealth Heads of Government Meeting in the spring, but let us do so while playing to the Commonwealth’s soft power strengths. If the Government try to play the Commonwealth as some alternative to EU membership they will run into trouble, not least from Commonwealth countries themselves.
On other fronts, as we have heard, there are various thoughts about where we go next in keeping the links with the EU and possible new links with the USA. On 16 January, Tony Barber wrote an interesting article in the Financial Times, headed “Britain’s Transatlantic Bridge Looks Shaky”. In it he makes two points of great relevance to this debate. First, he draws attention to the 28-page document drawn up as the basis of Germany’s new grand coalition Government. He tells us that the document,
“said much about German co-operation with France to deepen EU and eurozone integration. It stated that US, Chinese and Russian policies obliged Europe to assume more responsibility for its future. But on Brexit, and on the UK generally, the CDU-SPD document is deafeningly silent. For all the wishful thinking in London, Brexit is not a top priority for German politicians”.
Barber’s second point is that, between 2005 and 2015, the UK ran an average annual trade surplus of over £28 billion with the United States. The US Commerce Secretary Wilbur Ross has already made it clear that, if the UK wants a far-reaching deal, Washington expects London to depart from any close regulatory alignment with the EU. In other words, any bilateral trade deal is going to be as tough and hard-nosed as we know our American cousins can be.
This does not mean that we do not continue to build on our US relationship. A very old friend of mine—an American academic, John Reilly—in the Christmas newsletter he sends out to friends, summed it up like this, “Ours is a vast and resilient country, with a people still younger than most, a continent still richer than most, an economy more innovative than most, and an international record prouder than most”.
As has been said by the noble Lord, Lord Campbell, and others, the tectonic plates are moving and we are going to need the kinds of foreign policy initiatives that have already been enunciated, as well as, I say again, a well-skilled and well-resourced Foreign Office. I remember Jim Callaghan saying in 1974, as we were settling in, “This is a Rolls-Royce department”. Perhaps it is time to get the Rolls-Royce off its bricks and put it back into service.

Lord Houghton of Richmond: My Lords, I am hugely grateful for the opportunity to speak in this debate. It is only a couple of weeks since my introduction, so I hope that my desire to speak is not judged impetuous. In truth, I did not want to perpetuate the frustration of not being able to contribute, nor submit to the folly of awaiting a debate on which I had a special interest or strong views, only to be bound by the protocol of remaining uncontentious. So I thought I would speak softly in this debate, at least in part then to be eligible for bolder things to come.
I start by offering a general thank you to all those who have offered me such a warm welcome to the House. Even a number of noble and gallant Lords whose very proximity in a previous life I used to fear have been remarkably friendly. I single out for special thanks my two supporters: the noble Baroness, Lady Harris, and the noble Lord, Lord Hague—both selected carefully to emphasise both my Yorkshire and my soft power credentials. I most warmly thank all those members of staff who have been so courteous and helpful.
I think I am a rarity among recent defence chiefs in having a son who is a professional comedian. Comedians know little about American foreign policy, but comedic sons are good sounding-boards for maiden speeches and common sense. Tom, my son, likened this event to a “new material night”—defined as an occasion when a non-paying, often small audience, largely composed  of friends, gathers to hear you try out some new ideas, in the knowledge that they are not yet perfectly formed, nor necessarily that funny.
So here is my contribution to this debate—a contribution to an understanding of the gravity of its context from the view of a military mind. When I stood down as Chief of the Defence Staff 18 months ago, I privately offered a personal view to the staff on the state of the world. I recalled that I had spent much of my adult life rather simplistically hoping that the natural evolution of mankind was towards greater mutual tolerance, greater civilisation and a greater equality of opportunity and social condition—ultimately, a more inclusive global polity that was representative of commonly shared ideals and morality.
I had a parallel sense that this natural evolution would be accompanied by relative stability among nations: a sense that cataclysmic war, as witnessed in the last century, was a watershed in human awakening, and that our evolution towards collective civilisation would occur within an agreed international rules-based system to which all nations subscribed. My views were bolstered by ample academic evidence and bestselling books which irresistibly demonstrated that the fundamentals of human existence in respect of disease, famine and violence had never been better. There was a sustained revolution going on in human fortune. But then I qualified this euphoria. My more recent experience had rather dented my confidence in this somewhat idealised human journey. Indeed, increasingly, most of the evidence seemed to support a very different narrative.
First, as has been mentioned, a number of countries—Russia, Iran, North Korea and China—variously tended to the view, perhaps understandably, that the current rules-based order denied them the historic entitlement they sensed was theirs. They were not content with the status quo, nor with the stewardship of those who control it. Separately, demographics and economics were becoming, in combination, increasingly dangerous sources of global instability, either through a rebalancing of global economic power, as in Asia, or through the continuing maldistribution of wealth and opportunity within and between countries, especially in sub-Saharan Africa. Then there was the widespread growth in violent religious extremism, a phenomenon that threatens international security and the integrity of various nation states, most obviously Iraq, Syria and Libya. The world suddenly seemed a significantly less stable and certain—and a more dangerous—place.
As I finished my time as CDS, therefore, my historical judgment was that inevitable change, often accompanied by violence, looked a far better descriptor of mankind’s future, and my philosophical judgment was that human nature still tends to the Hobbesian: driven by selfish concerns, primarily those relating to individual survival, achieved if necessary by brutal means.
Even if these judgements seem overstated, noble Lords might at least allow the conclusion that competition is a more natural human condition than peaceful coexistence, and that stability and a rules-based global order do not occur naturally. Indeed, stability, peaceful coexistence and a rules-based order need to be imposed, primarily consensually through alliances of interested parties, and occasionally through the willingness of  those parties to threaten to use, or to use, force—but always in the context of mature leadership and wise policy.
This, to me, is the context of this debate. The grand strategic challenge of this age is how we accommodate the change that is inevitable while sustaining the stability on which the continued betterment of the human condition depends. The strategy needed to meet this challenge will be achieved only through a combination of wise policy, strong capability and thoughtful leadership. The absence of such a combination—or, worse still, its replacement by policy and leadership that is antagonistic or self-serving—runs the grave risk that change will be violent, stability will fail and the journey of human betterment will suffer badly. So while we look to the United States of America to lead, the United Kingdom should also look in the mirror at our ability to discharge a supporting role.
A better definition of this role forms the context of our national ambition, our place in the world and, for me—dare I say it?—a far clearer understanding of the sort of Armed Forces we actually need. I risk, however, straying into a separate debate—one to which I hope I will now be permitted to contribute.

Lord Hennessy of Nympsfield: My Lords, I am truly honoured to follow the noble and gallant Lord, Lord Houghton of Richmond, who is such a welcome recruit to your Lordships’ House—on what one might call the warriors’ Bench.
I was honoured to serve as a member of his strategic advisory panel when he was Chief of the Defence Staff. I always associate the words “strategy” and “strategic” with the noble and gallant Lord. He has, in the language of quantum physics, a real gift for discerning both the waves and the particles that go into our nation’s defence posture, and the foreign policy and influence in the world that our Armed Forces support. He is, too, as we have heard, a son of Yorkshire, so we can expect an enduring and welcome injection of directness and common sense in our future deliberations. I congratulate the noble and gallant Lord on a very fine maiden speech.
I will concentrate this afternoon on what one might call the hidden dimension in diplomacy, foreign policy and international affairs, by which I mean intelligence, particularly the intelligence-sharing arrangements that have served the UK so well for more than 70 years. I refer especially to the so-called “Five Eyes” network, embracing the United States, the United Kingdom, Canada, Australia and New Zealand, which the most recent report of the Intelligence and Security Committee of Parliament rightly calls “the closest intelligence partnership in the world”. It is also the most enduring, because in essence the “Five Eyes” is the World War II intelligence alliance, which has run on right through the 40 years of the Cold War and into the age of multiple threats that has followed. The UK-USA element within it, privately but not officially called the “two eyes”, is what gives our country its genuine global intelligence reach. Only two other nations possess that: the United States and Russia, with China coming up fast.
This intelligence reach is of critical value to the UK in a fragile, volatile and often scarcely readable world. For all the skills of our intelligence agencies and Defence Intelligence inside the Ministry of Defence, without the “two eyes” and the “Five Eyes” we would slip instantly into the second rank of intelligence powers.
This most special of special relationships rests on an array of agreements and one treaty—the so-called UK-USA treaty of the late 1940s. Participating nations are, however, not obliged to pass on or share intelligence that they garner. Anything that happened, on either side of the Atlantic, to staunch the flow would be a blow of considerable proportions on many levels, because we are an intelligence-trading nation as much as a diplomatic trading nation—to borrow a phrase used by my former Times colleague, Geoffrey Smith. What is of some immediate concern to the secret world is whether Brexit could impact on the skein of valuable bilateral intelligence and security arrangements we have with our European partners, to which other noble Lords have alluded.
The ISC caught this anxiety well in its report, published just before Christmas. I should point out that I have an air of regret about the ISC because we have got out of the habit of debating its annual reports in this Chamber. That is a great pity and we should restore that debate. The ISC said just before Christmas:
“Whilst none are as deep as the Five Eyes, the Agencies nonetheless have significant relationships with other countries. In particular, several areas of obvious shared intelligence interest exist with our European allies—primarily on International CounterTerrorism but also on other Hostile State Activity and Serious and Organised Crime”.
In that context, Parliament and Her Majesty’s Government should take the ISC’s concluding recommendations deeply seriously. It said:
“European mechanisms play an essential role in the UK’s national security, particularly at a time when the Agencies have all emphasised the importance of enhancing their cooperation with European counterparts. We urge the Government to be more forthcoming with its assessment of the associated risks of the UK’s impending departure from the European Union, and the mitigations it is putting in place to protect this vital capability”.
It went on to say:
“Once the UK has left the EU, intelligence cooperation is an area where it can continue to be a leader amongst its European allies”.
I say amen to that.
Such matters come perhaps into what one might call the hidden wiring capacity of our international relationships, but the value we can bring as a top-flight intelligence power, not just to ourselves but to our allies, must not go unheard amid the fractious cacophony that Brexit has brought to our politics and our national conversation. Good, carefully assessed intelligence is where hard power, soft power and so-called sharp power meet. As a country, we need it to shape our actions, our precautions and our strategy-making as much as we ever have in peacetime before.

Lord Anderson of Swansea: My Lords, I congratulate the noble Lord, Lord Ashdown, and I will make three reflections. One is on the unpredictability of current US foreign policy; the second is to offer certain examples; and the third on what is our appropriate UK response.
In the past, there have been periods when we have been comfortable with US foreign policy and others when we have been less so. Those differences reflect in part our respective geography, history and culture. Our tradition is more elitist, that of the US led more by the democratic tradition, which was described by Alexis de Tocqueville as being subject to waves of popular emotion. Past phases of US foreign policy included the post-First World War liberal internationalism, followed by the isolationism of the 1930s and, post-Second World War, the commitment to international institutions with the Marshall plan, Bretton Woods and NATO. Then there was the harsh realism of Suez, the moralism of Carter, Reagan’s naive expansion of democracy, the crusader element of Bush—leading to the interventions in Afghanistan and Iraq—and the ultra-cautious realism of Obama, which vacated the ground in the Middle East to Iran and Russia.
During those periods, however, at least US policy was predictable. Under President Trump, it is more capricious. President Zigzag has a large ego and oscillates from tweet to tweet. One of the few consistencies is the aim to overturn the Obama legacy and have “America first”. It is therefore more difficult for our Washington embassy to report accurately on the changes. Think also of the US ambassadors in Africa who have carefully built up relationships over time, only to see them demolished by the ill-considered expletives of President Trump. All this is compounded by cuts in personnel and attacks on the intelligence and diplomatic communities, but we are hardly a good example on the reduction of personnel.
The President’s idiosyncrasies have caused real problems for US ambassadors, not least the US ambassador in London, who was wrong-footed by the President’s decision—taken on spurious grounds—not to open the new US embassy here. When the President calls the press “enemies of the people”, it makes it the more difficult for the West to set an example and criticise press curbs in places such as Russia and Turkey. Equally, when he criticises the judges, it makes it more difficult for us to carry on our tradition of supporting the rule of law elsewhere in the world.
Particular areas of concern include Israel and Palestine. The orthodox view is that there can be no settlement without US involvement, but this US role has been made less possible—perhaps impossible—by the recognition of Jerusalem as Israel’s capital and the reduction in aid to UNRWA. The President has made childish comments about the North Korean leader such as calling him Little Rocket Man, and said, “My button is bigger than yours” and “I will destroy North Korea”. These were all to the embarrassment of our ally, South Korea, which seeks to build bridges with the north.
By reducing security aid to Pakistan, the US could well lose a key source of intelligence on terrorism. The points on Iran have already been well made by the  noble Lord, Lord Lamont, and others. There have been similar brash utterances on climate change, Latin America, NATO and Russia.
How should we respond? Our response in respect of climate change, Iran and the Middle East has been measured and correct. We have avoided bluster but at the same time have accepted that the US is a key ally—particularly in the field of intelligence and US agencies—and have avoided divergence wherever possible, looking long. We should not seek differences with the US but should recognise that over great swathes of policy, our position is much closer to that of our EU partners. This is hardly surprising, as the noble Lord, Lord Ricketts, would no doubt say, because of the working relationships developed over many years by diplomats and Ministers.
We will continue to bring major assets to the table: the P5 and our hard and soft power, which are relevant to our current discussions with President Macron. We will co-operate with the French on defence, building on St Malo and the Lancaster House agreements on climate change and many other policies. What shall we exchange for the French gesture on Bayeux? As a Francophile decorated by France, I counsel against offering our French colleagues the Maclise paintings in the Royal Gallery. Yes, we should avoid policy divergences with the US but, notwithstanding Brexit, we should align our policies and interests with those of our EU partners, particularly France.

Baroness Tonge: My Lords, I congratulate the noble Lord, Lord Ashdown, in his absence on raising this debate. I am filled with admiration for his promotion of diplomacy over bombs, which was very good to hear. That was repeated by the noble Lord, Lord Lamont, in his remarks on Iran.
Despite the antics of the current President of the United States, that country is our friend and ally. Especially in the light of the appalling decision to leave the European Union, we might be more and more dependent on our American cousins in the future. I wish it were not so but it is. However, there is an opportunity to do things differently following two actions by Donald Trump. I will address just two issues.
After decades of a so-called peace process between the Palestinians and Israelis, Donald Trump has chosen to move the US embassy to Jerusalem, thus recognising Jerusalem as the capital of Israel, as mentioned by the noble Lord, Lord Anderson. He could not have made a more inflammatory move. By doing so, he has destroyed any illusion we might have had that the USA was acting as a neutral broker in the peace process. This has been compounded by the reduction in aid to UNRWA, which has been looking after Palestinian refugees in the Middle East since the creation of the State of Israel. The Palestinian leadership is furious; so are Muslims and Christians all over the world. It is time for our Government to take control of this situation. Together with the European Union and the Arab states, we have an opportunity to form a new neutral negotiating body not led by the USA. I remind our Foreign Office, if it needs any reminding after last  year’s commemoration of the Balfour Declaration, that we—Great Britain, as we once were—are mainly responsible for this mess, and it is time we faced our responsibilities and made amends.
My other point concerns the link between foreign affairs and international development. The FCO is to receive funds from DfID in future years. It should be reacting with horror at another of Donald Trump’s announcements: the infamous Mexico City policy or global gag rule. It is why I am surprised that so few women Peers have chosen to speak in this debate. This announcement reinstated the ban on funding for all development programmes relating to safe abortion or advice about safe abortion, as under George W Bush and Ronald Reagan, but Trump has expanded the ban to the vast majority of US bilateral global health assistance programmes including those on HIV, maternal and child health, malaria, nutrition and many others, which total $8 billion-worth of funding. That ban means a delay in the reduction of maternal death rates and a halt to the spread of family planning in developing countries, which are essential if a country is to progress, which is in our interest.
Why should this concern the FCO? The connection is to be found in reports from the World Bank. A rise in GNI in developing countries occurs after a decrease in maternal mortality and declining fertility rates in those countries. The Asian-tiger countries realised some time ago that good maternal health and smaller families would release women to join their country’s workforce, hence their success, which is a great advantage to us. In recent years Rwanda, Vietnam and Tunisia have demonstrated this, and it is all good news for our country. It is therefore essential that our foreign policies and development funding should reflect this and take very seriously the changing attitude of the Administration in the United States.
I conclude by asking the Minister two questions. What plans do the Government have to recognise the state of Palestine and make it a reality instead of just a mantra they recite from time to time? With its new funding from the Department for International Development, what will the Foreign Office do to persuade the USA Administration to reverse their cruel and foolish implementation of the Mexico City policy?

Baroness Helic: My Lords, I thank the noble Lord, Lord Ashdown, for initiating this debate. It is a privilege to speak after so many noble Lords who have unrivalled experience, knowledge and collective memory of international affairs.
Over the past year, we have witnessed a different kind of politics and leadership emanating from Washington. While it is regrettable to see an apparent weakening of American leadership in the world, it is also regrettable that so much time has been spent analysing personalities rather than politics. It is extraordinary that the cognitive tests of the President of the United States made more headlines this week than the facts that 400,000 Yemeni children are severely malnourished due to a blockade by countries we consider our allies, that nearly 1 million Rohingya refugees are stuck in a no-man’s land of statelessness  and abuse, and that Russian-sponsored paramilitaries are roaming around the most unstable part of Europe, the Balkans.
I share the concerns expressed by many noble Lords regarding the unilateral decision to disregard UN Security Council resolutions on Jerusalem, the downgrading of human rights and the threat to tear up the Iranian nuclear agreement, among other current US policies, although I note that the United States’ policy on NATO has had a healthy impact on the willingness of allies to contribute more to mutual self-defence.
Whatever failings we perceive in the Administration of another country, it does not absolve us from our responsibility to put forward foreign policy ideas and initiatives of our own—as the United States Administration is undoubtedly doing, whether or not we always agree. We should be less preoccupied with the tweets and habits of the President of the United States, and more focused on our own policies and the strategies we wish to pursue with the US as a whole. I say this for everyone on this side of the Atlantic. American support and engagement, including the security guarantee through NATO, has been a crucial factor in the success and stability of Europe over the last century.
The transatlantic alliance rests on common political and economic interests, shared history, and vital military and intelligence links. It would be absurd if our history of thinking and acting together could be completely thrown off simply by the election of an unusual President. Furthermore, it would be a development welcomed with glee by our adversaries.
On this side of the Atlantic, we ought to admit that we have been distracted by our own difficulties, including but not limited to Brexit, which has contributed to an atmosphere of “each country for itself”, rather than joint thinking and common purpose. However all-consuming the demands of Brexit, we cannot put on autopilot our foreign policy responsibilities as a member of the UN Security Council, and as an economy dependent on the international rule of law, while the seeds of future threats are being sown around us, whether in Syria, Iraq, Burma, Yemen, the Balkans or elsewhere.
It is deeply concerning that our undeniable talent and resources in foreign policy have been thrown into Brexit to the exclusion of almost everything else. Here, I echo the wise words of the noble Lord, Lord Robertson. While we are pulling out of the EU and refocusing on trade and the Commonwealth, the world has not stopped to wait for us to rearrange the chairs.
We urgently need to see fresh thinking and bold initiatives with the United States and our allies to revive viable and credible peace negotiations in Syria, to hold the Burmese authorities to account for ethnic cleansing and alleged genocide, and to muster a serious collective effort to roll back Russian undermining and interference in some forgotten parts of Europe, notably in the Balkans.
It cannot be that we have regressed so far that there is now talk again of spheres of influence, rather than democratic rights, the rule of law and universal freedoms. Anyone who has practised foreign policy knows that we are most effective when we act jointly with the United States and with Europe.
I am not romanticising this relationship, but anyone who says that the transatlantic alliance built over the last century is not something we have to build on, strengthen and be able to rely on at a time of growing danger internationally, simply because of a different type of presidency in Washington, is missing the bigger picture.
We have never lived in a more interconnected world; yet, I have never felt that democracies were more parochial than they are today. We need to rediscover our sense of unity and purpose and confidence, based on our values, and cannot ever simply accept that America is disengaged. The last time America was disengaged was in the Second World War—and then, we waited too long. We should never observe that trend without doing everything in our power to reverse it.
I therefore welcome the Prime Minister’s engagement with President Trump and I encourage her to pursue it further, looking beyond trade agreements to transatlantic security as a whole and the robust defence of the liberal order that we in Europe built with the United States—which is an indispensable today as it ever has been.

Lord Judd: My Lords, that was a courageous and forthright speech.
I declare my interests as a member of the advisory panel of the United Nations Association. Like others, I want to thank the noble Lord, Lord Ashdown, most warmly for having secured this debate and for the challenging way in which he spoke.
The first reality of existence is that we live in a totally interdependent world. Individually and as a nation, we shall be judged by posterity on our success or failure in meeting that reality, and on the constructive and imaginative part we play in forging the co-operative international remedies and actions that are essential to ensure the survival and well-being of the human race. Forbidding as things may already seem under Trump, the true humanitarian and security costs of his actions will become ever clearer in future. Coming so soon after his precipitate and dangerous action over Jerusalem, this week’s news that the Trump Administration are to cut from US$350 million to US$60 million their contributions to the work of UNWRA is a glaring example. Unless immediate steps are taken to make good the void, quite apart from the grave humanitarian consequences for schools, medical clinics, food and income programmes, the negative impact on stability and security will, sadly, prove significant.
While in the European context we should be promoting our commitment to NATO and to the Council of Europe, and indeed taking seriously the work of the Ministers of the Council of Europe, it is globally that we have to redouble our efforts. We must see the UN as our UN, not as something separate from us. Particularly  as we are a permanent member of the Security Council, the UN’s successes or failures are inescapably ours and the responsibility for putting right shortcomings is very much our responsibility. The same is true of the UN family and specialised agencies. We simply must forgo the temptation to cherry-pick our favourite bits of multilateralism. We have to play a full, effective and, where necessary, critical part in the system as a whole. That demands a principled, multilateral and consistent foreign policy. It is greatly to our credit as a nation that, thanks to what is enshrined in our legislation, we are world leaders in overseas aid and development. However, the influence we gain by that is considerably negated by, for example, putting trade before human rights, as happens with Saudi Arabia, with dire consequences in Yemen. Similarly, when we shirk from playing a committed part in discussions on nuclear disarmament—condescendingly, at times—that undermines our credibility.
There is a central role to be shouldered by UK diplomacy—I am glad that this has been repeatedly emphasised during the debate—and by the British Council, the BBC and others if we are to sustain and enhance our influence on the world stage. Given the scale of the need, deprivation, suffering and injustice that remain across the world, our overseas aid programme must at all costs remain a priority. However, that must be alongside increased funding for the FCO itself, with the emphasis on multilateralism and operations that support work at the UN level. Hopefully, the new drive for multilateralism will help to justify what I believe is our otherwise questionable permanent membership of the UN Security Council. It will also gain us a part in building a broad and diverse set of alliances to replace the old order.
The list of actions is challenging, but the opportunities are huge.

Baroness Falkner of Margravine: My Lords, I thank my noble friend Lord Ashdown for initiating this debate, even though I sometimes do not share his historical analogies or gloomy prognosis of what is to come.
The US role in securing the liberal international order that the world has enjoyed over the last 70 years is changing—there is no doubt about that—but it has been changing since the more stable certainties of the Cold War fell away. It is giving rise to a set of new and complex global issues. Since the early 1990s we have seen a unipolar moment but at the same time we have seen enormous disruption in what we thought were certainties: the rise of climate change, the rise of terrorism and the proliferation of weapons of mass destruction.
In preparing for this debate, I was fortunate enough to realise that Chatham House is wonderful. It is a UK institution that we really must cherish and which has an extraordinary reputation around the world. If I recall correctly, my noble friend Lord Ashdown is himself an honorary president of the institution. It kicked off 2018 by producing a special edition of its journal, International Affairs, on the future of the liberal international world order. This is a very important moment to help us reflect on the changes I have  described. In the leading article in the journal, Professor John Ikenberry from Princeton, who I know my noble friend Lord Wallace of Saltaire also knows, makes a few central points that I think worth repeating. He says that preserving the liberal international order in the face of globalisation is a,
“problem of authority and governance”.
That is what we have seen with the rise of populism and authoritarianism.
The central question therefore becomes: who pays, who adjusts and leads? How do you redistribute authority? It is a matter of managing change as power and authority shift from the West, the EU and Japan to rising powers such as China and India. My money is still very much on the United States and, broadly, with the West. Indeed, even through the Trump presidency, despite the reservations that several noble Lords have voiced today, I would argue that there are more continuities than disruptions. The US economy has not tanked as predicted; indeed, the EU and UK can look with envy at a growth rate of nearly 3% and unemployment at just above 4%. NAFTA has not been scrapped; it has been renegotiated, but then again we only wish that our own renegotiation had gone better. The checks and balances that are hard-wired into the US system and constitution are bigger than the incumbent of the White House, including when it comes to nuclear stand-offs. Lastly, even on the question of climate change, my greatest concern is the US withdrawing from the Paris agreement but that will be implemented only after the next presidential election, so who knows? There might be a change of view in that regard.
The UK’s own changing relations must embrace both continuity and change. Continuity comes from remaining a steadfast partner to both the US and the EU, including making the right calls when confronted with divergences in international affairs, for example over Iran, which has been widely mentioned across the House. However, we must also change in recognising that, as we sit among our allies as defenders of the liberal international order based on multilateralism and a rules-based system, our values matter more than ever. The defence of freedom, human rights and democracy in the face of the rise of authoritarianism across the world makes defending and standing up for our ideas and values even more important, even though there appear to be temporary reverses.
The West has experienced many crises of confidence in the last 70 years. Think of the Cuban missile crisis, the nuclear stand-offs in Asia between India and Pakistan, and 9/11 and the war on terrorism. No doubt the disruptions will continue to challenge us, even as we come up to the 70th anniversary of the Universal Declaration on Human Rights. I congratulate the noble Lord, Lord Judd, on his role in supporting the UN system. Even as we come up to this period, it is important that we keep our nerve. The power of our values and ideals still trumps all the other ideologies out there. People around the world can see that, which is why they still gravitate to western culture, western economic models and, most importantly, western democracy and freedom.

Lord Hylton: My Lords, if we look at the Middle East, it seems full of conflict and unpredictability; much the same could be said of American foreign policy, particularly in that region. I would therefore like to describe a new and positive initiative.
Since 2014, the Finnish Government and the British charity Forward Thinking have developed the Helsinki Policy Forum. I declare an unpaid interest as a trustee of the charity. The forum is so called because it first met in Helsinki, and it aims to increase dialogue between key powers so as to develop shared analysis, with the help of participants from the UN and international bodies, together with leaders in business and NGOs. It is well aware of the influence of religions in that region.
The forum tries to ease tensions and prevent conflicts and to identify policy proposals that can be implemented in practice. In three years, 95 such recommendations have been made, and I am glad to say that a large majority have been taken up by Governments, parliaments, think tanks and the media. The aim is to find win-win approaches that serve the common good, so that all may benefit. A meeting on Syria, for example, included Egypt, Turkey, Iran and Saudi Arabia. The ability to call together high-level officials from major states stems at least in part from 13 years of painstaking and patient work by Forward Thinking with the political and religious extremes in both Israel and Palestine.
In the absence of formal institutions for preventing and resolving conflicts, the forum works in three ways. First, it raises awareness, to alert and prevent; secondly, it builds confidence through face-to-face meetings, to address a widespread lack of trust in the region; above all, it seeks to highlight mutual and wider common interests—a small example of the latter was the agreement between Iran and Saudi Arabia for Iranian pilgrims to take part in the 2017 hajj.
Between larger meetings, the forum holds working groups on single issues such as economic co-operation or migration. It is always in close touch with foreign policy groups in Berlin, Rome and Istanbul, as well as the Davos World Economic Forum. I commend the Helsinki Policy Forum to our Government, and indeed to your Lordships, and to all who want to see a more co-operative and peaceful Middle East. What has been done shows once again the value of neutral ground and independent facilitation. As Sir Jeremy Greenstock, our senior adviser, wrote in Forward Thinking’s recent annual report, in the context of international relations and interests the Middle East is the canary in the mine.
I conclude with two probably controversial questions, for which I take full personal responsibility. Will Her Majesty’s Government move from condemnation to a better understanding of the history and current evolution of national resistance movements such as Hamas and the Kurdistan Workers’ Party? Will they make plans for dismantling sanctions on Syria, given that those probably do more harm to the Syrians than to the current regime? I do not want to provoke the Foreign Office, but I will just say that these questions arise from my many visits to Israel and Palestine, including Gaza, and also to Turkey, Iraq and Syria.

Lord Taylor of Warwick: My Lords, I too thank the noble Lord, Lord Ashdown, for securing this important debate today. I also congratulate the noble and gallant Lord, Lord Houghton, on an excellent maiden speech. When I was chancellor of Bournemouth University, I had the pleasure of conferring on the noble Lord, Lord Ashdown, an honorary doctorate, and I still remember the inspiring way he spoke that day.
I declare my interests, in that I am married to an American, and my children are British and American. I am also an honorary colonel in the United States army, am honoured to have been given the freedom of a number of American cities, and have enjoyed lecturing at various American universities.
The “special relationship” between the United Kingdom and America was first coined by Sir Winston Churchill in a speech in 1946. Our two nations share a strong common heritage. My wife’s ancestors John and Priscilla Alden were pilgrims on board that famous ship the “Mayflower”, which made the voyage from Plymouth to the new world of America in 1620, nearly 400 years ago.
Although we share the English language, cultural differences between America and Britain manifest themselves from time to time. To my wife Laura, cricket means an insect she used to hear during the night in her home town of Dallas, Texas, whereas to me cricket is a fine summer game, played occasionally in between frequent showers of rain. These are but small differences between our two cultures.
More importantly, when we travel to America it is clear that the British brand—for example, British royalty, our literature and our history—remains very strong there. These bonds are stronger than whoever happens to be President in the White House, and they will endure even beyond temporary differences in foreign policy. I recently had the privilege of being interviewed by Fox News TV about Brexit, and it was clear to me from the questions that America is listening to and watching what is going on in Britain. I am delighted, too, to have been invited to President Trump’s forthcoming prayer breakfast in Washington DC. It will be just me and the President of the United States of America—oh, and 3,000 other guests.
When it comes to foreign policy, historically the actions of the United States have had a profound effect on the rest of the world. When Donald Trump became President, he made it clear that he was going to focus more on greatness at home. We could criticise him for that, but in essence that is what Brexit is about—giving Britain the opportunity to become not just Great Britain but greater Great Britain. Let us not forget that one of Mr Trump’s earliest actions on entering the White House was to restore the bust of Sir Winston Churchill to the Oval Office. That was an important signal of the US President’s bond with, and respect for, Great Britain.
Concerning foreign policy, let us consider briefly the situation in the Middle East, particularly in Israel. American Presidents have endeavoured to broker peace between Israel and Palestine, but that has led to a stalemate situation, where the peace process has become  stagnant for some years. On 6 December last year, Mr Trump recognised Jerusalem as the Jewish capital of Israel and announced the intention to move the American embassy from Tel Aviv to Jerusalem. This decision also affirmed the biblical foundation for that city being the capital of Israel, and Israel being the true home of the Jewish people. This was of course confirmed by the British Government 100 years ago, with the Balfour Declaration in 1917. Mr Trump has declared his support for Israel, and it is important for the United Kingdom to continue supporting Israel and world peace, as Israel is the only true democracy in the Middle East.
The Holy Bible says, in Matthew chapter 5 verse 9:
“Blessed are the peacemakers”—
not peacekeepers but peacemakers; it is very much an active thing. To achieve peace, it is important to recognise that there are agents of peace which world leaders can by their policies halt, misuse or use to not only benefit their own people but help to create peace. In Israel, a distinct agent of peace is innovation. Israel has a small population yet ranks third in the World Economic Forum’s rankings of the most innovative economies. The world has benefited from Israeli inventions too numerous to mention here. Israeli intelligence services have helped stop a wide number of terrorist attacks around the world. Many Arab nations now look to Israel as a strong ally in their common battle for peace against militant Islam. These Arab nations now seek Israeli technology to help grow their own economies, so trade can be an agent of peace.
The UK has 28 trade envoys but only five Trade Ministers. Trade is an agent of peace. Will the Minister say when the Government intend to appoint more trade envoys? There are 282 foreign embassies. Is it not time for the UK to host a peace conference inviting ambassadors to talk about making peace?
In conclusion, the first duty of any Government is to protect their people, but we live in a world where geographical boundaries will mean less and less. Perhaps one should remember that there is only one race—the human race. This is why President Thomas Jefferson was right when he said simply:
“Enemies in War, in Peace Friends”.

Lord Alton of Liverpool: My Lords, at a time of momentous change on both sides of the Atlantic, the noble Lord, Lord Ashdown, has done us all a great service by initiating this debate.
In 1946, Churchill coined the phrase, “special relationship”. In cautioning against anti-Americanism throughout the debate, we have rightly cited the Marshall aid programme and NATO. We could add to that the Truman doctrine and the Universal Declaration of Human Rights, in which Eleanor Roosevelt played such a decisive role, all of which were indispensable in opposing totalitarianism, championing democracy and safeguarding peace and the rule of law. In sustaining these achievements and in our mutually advantageous relationship, we need far more wisdom and self-restraint, nowhere more so than in North Korea, where 3 million lives, including those of British and American servicemen, were lost in the Korean War of 1950 to 1953. I declare  an interest as founder, 15 years ago, of the All-Party Parliamentary Group on North Korea, which I continue to co-chair.
With six nuclear tests last year alone, North Korea continues to act in defiance of Security Council resolutions. It is said to possess 5,000 tonnes of chemical and biological agents and 1,000 artillery pieces trained on Seoul alone. We have seen what it can do with abductions and assassinations, let alone cyberattacks, the hacking of crypto-currencies and cyber robberies, which can directly impact the United Kingdom. Sanctions, implemented by China and, to a lesser extent Russia, are having some welcome effect. Although the law of unintended consequences may yet lead to a catastrophic war, there has been some welcome movement in Pyongyang, from the Winter Olympics, and maybe a shared flag, to the reopening of eight formal lines of communication between north and south. However, as that regime strives to survive, Pyongyang will be duplicitous and try to drive wedges between the United States and its allies and encourage anti-American sentiment.
The north’s calibrated strategy will aim at securing relief from sanctions, but they are past masters of offering concessions that are never honoured. We should recall that, between 2005 and 2009, the US unfroze $25 million of a North Korean fund at Banco Delta Asia, which the regime then used as a slush fund. We must beware of being what Lenin called “useful idiots” in the hands of a well-practised and often cunning snake oil salesman.
We should stay close to the United States and work together, as Ronald Reagan and Margaret Thatcher did so effectively during the Cold War and the Helsinki process. Along with sanctions and diplomacy and military deployment—including, last week, three stealth B-2 Spirit bombers to Guam and HMS “Sutherland” and HMS “Argyll” to the Asia Pacific—we must never lose sight of breaking North Korea’s information blockade and the championing of both people’s human rights.
Four years ago, a United Nations commission of inquiry concluded that the,
“gravity, scale and nature”,
of the human rights violations in North Korea,
“reveal a State that does not have any parallel in the contemporary world”.
Its chairman, Justice Michael Kirby, said:
“This Commission’s recommendations should not sit on the shelf … It is now your duty to address the scourge of human rights violations and crimes against humanity”.
However, while the report’s recommendations gather dust, 200,000 people remain incarcerated in the regime’s gulags, where more than 300,000 people have been killed. The regime rapes, tortures, indoctrinates and lets millions of its people starve to death. Like Stalin, Kim Jong-un uses mock trials, purges and public executions.
Consider the plight of North Korean refugees. Just two months ago, 10 North Koreans, including women and a four year-old child, were repatriated to North Korea from China, despite South Korea’s willingness to give them refuge and citizenship. The father of one of the children, who had reached South Korea, issued an appeal broadcast by the BBC. He said that his wife and son would,
“either face execution or wither away in a political prison camp”,
if sent back to North Korea. He said that he was haunted by images of his young son in detention:
“I can almost hear my baby calling my name”.
I was genuinely shocked to receive a parliamentary reply about this case, in which the Government confirmed that they had not made representations to China on behalf of those fleeing refugees.
We should not remain silent about the nature of this regime. We should act whenever we can, nor should we impute in some foolish way a moral equivalence between North Korea and the United States of America. In the Cold War, once destruction was mutually assured and we realised that weapons used by either side would lead to obliteration, other weapons proved more effective; we should deploy them all. The Helsinki process opened eyes and minds to systematic injustices. As walls fell, this ushered in an era of extraordinary change. It remains the historic role of our two nations to challenge and help change even the most nightmarish and oppressive of regimes.

Lord Turnberg: My Lords, it is always a pleasure to follow the noble Lord, Lord Alton. I join others in thanking the noble Lord, Lord Ashdown.
The virtually universal view of President Trump—at least around this Chamber and outside it—is that he is unbelievably inept at best and a malign force at worst. Internationally, he has finished up being the most reviled President for very many years. He campaigned on a platform of isolationism and protectionism mixed with a dose of racism, in order, he said, “to make America great again”. However, all he has succeeded in doing is leaving my American friends and relations wringing their hands in despair over his domestic policies, and as he has brought America’s standing in the world to the lowest level for very many years. However, considerable dangers follow hard on the heels of those views of the man and the opinions that are now projected on to American values as a whole. Despite its President, America remains the dominant voice of western democracy, whatever Trump says or does.
At a time when there are huge dangers lurking around the world—as many have spoken about—when a Russia led by a predatory Putin is patrolling our skies and seas, intent on expanding his influence, when Chinese versions of civil liberties are inflicted on millions of their citizens, when a nuclear North Korea is making all sorts of warlike noises, when Iran, with its sponsorship of terrorism and untrammelled ballistic missile programme, is so unstable and the whole of the Middle East is in turmoil—when all this going on, we in the UK need to think very carefully indeed about jettisoning America and what it stands for when we and the rest of the democratic world need it most. We should especially think about that carefully when, as the noble Lord, Lord Hennessy, emphasised, we need to share intelligence. When America itself needs support, we should be careful how we react to its President’s outbursts. As we think of our long-term, post-Brexit trade needs, it is worth remembering that at worst he will be there only for eight years, and at best for four years, or maybe less.
However, there is one of Trump’s recent interventions on which I would like to focus—his proposal to move his embassy in Israel to Jerusalem. On this issue I am afraid that I must part company with one or two earlier speakers. It certainly has been the focus of many knee-jerk responses in the media, but surprisingly, with rather less dismay in the Middle East. Even the Palestinian response was muted, when it became obvious that protesters at the Damascus Gate were outnumbered by the TV and media reporters standing around. Provocative it was, but was it a profound change of policy given the facts of the case? First, it is worth remembering that west Jerusalem is where the Israeli Parliament and all its government departments are sited, together with its Supreme Court. It is faintly ridiculous to see ambassadors and their staff spending hours travelling from their embassies in Tel Aviv along the motorway to Jerusalem every day. The population of west Jerusalem is 95% Jewish and it is only in west Jerusalem that Trump is suggesting his embassy should be based.
East Jerusalem, on the other hand, is Arab by a large majority, and the Arab-Palestinian population there is growing. There is no way that Trump has proposed that the American embassy to Israel might be placed there. Now that would really be provocative. Indeed, he said in the same speech that the division between east and west Jerusalem would be entirely a matter for the two sides to agree between themselves. That was the second part of his speech, which was largely ignored. No matter that some Palestinians and Israelis speak of Jerusalem being their undivided capital, I cannot believe that any sensible person thinks that Israel will hand over western Jewish Jerusalem, with all its machinery of government, to Palestinian control, nor that it is to Israel’s advantage, in any way, to hang on to largely Palestinian east Jerusalem.
In truth, the battle is not about east and west Jerusalem and their burgeoning populations. It is about the Old City and specifically the Holy Basin, where the al-Aqsa mosque, so precious for the Muslims, and the Western Wall, so significant for the Jews, are sited. That is where the focus of all the most vital interests in Jerusalem lie and where there is so much mutual suspicion. President Trump did not say or imply anything about this most contentious of all the issues on Jerusalem. Resolution of who controls the Holy Basin has to await another day, perhaps another generation.
Moving an embassy to Jewish west Jerusalem seems to me rather less contentious. It recognises where Israel has placed its centre of government and does not preclude any negotiation between the two sides on what might happen to the rest of Jerusalem. This may be one of the few outpourings from President Trump with which I feel some agreement.

Earl of Sandwich: My Lords, I too am grateful to the noble Lord, Lord Ashdown. His debate has already illuminated what is a very confusing, if not threatening, picture to all of us. The President has yet to address important questions of foreign policy, because almost everything he says seems to be designed for internal purposes—not, apparently, for the good of the world outside. The State Department is left wondering  what its job is: morale is low, people have resigned, humanitarian budgets are squeezed, and the Secretary of State seems flummoxed by conflicting instructions. It is therefore hard to examine a US non-foreign policy unless one makes a few suppositions.
I am going to focus on the western Balkans today, since our International Relations Committee has just published a report on the Balkans. The committee also had the benefit of the evidence of the noble Lord, Lord Ashdown, based on his considerable experience in the region. The noble Lord, Lord Howell, and his colleagues must be thanked for bringing the Balkans back on the agenda in a timely fashion, while the Government are preparing to hold a Balkans summit. I have frequently asked the Government whether EU enlargement is still on the table, and the answer “Yes” is sounding a little half-hearted. Rather surprisingly, the Select Committee took no evidence from the USA and made little reference to its foreign policy. I conclude that, with such a maverick President, few people can claim to understand US foreign policy in Iran, Jerusalem or anywhere else, let alone the western Balkans.
However, one can piece together a few facts, especially relating to NATO, which traditionally is aligned with the views of the US. NATO’s Jens Stoltenberg made a strong stand on Georgia last year, demanding that Russia remove its troops from the two breakaway provinces of Abkhazia and South Ossetia. The US must have been behind this initiative. On the other hand, as General Rose pointed out to the committee, there is a lot of interest in eastern Europe in co-operating with NATO. Even Serbia, he says, has held as many as 22 military exercises with NATO in the past year.
We have to understand that, from the Russian point of view, it is NATO and the west that are hostile to them and trying to push back the frontiers through hard and soft power. My new noble and gallant friend Lord Houghton touched on this. While President Putin claims to be a Slavophile, looking to Asia rather than Europe, Russia has been leaning in both directions at least since the time of Peter the Great. The Select Committee concluded that, despite Russia’s resentment, the peace and stability of the Balkans could be enhanced by further NATO co-operation and specifically by support for the proposed membership of Bosnia and Herzegovina, and Macedonia. It is unthinkable that this does not reflect the policy of the new US Administration. This is in some contrast to the apparent lack of enthusiasm within the EU for the accession of new members, stemming from President Juncker’s comments in 2014. Some witnesses to the committee felt that the EU was watering down the Copenhagen principles of democracy and the rule of law.
I would finally like to mention Kosovo, which I visited twice with the IPU. I declare an interest, in that I am proud to have a Kosovan-Albanian son-in-law. Kosovo is another example of a state in which we invested a lot of political, as well as military, capital since the war of 1998-99. It is only half a country, while four EU countries refuse to recognise it and Serbs virtually rule the north with Russian approval. The murder of a leading Serb politician in Mitrovica this week was another sign of insecurity there. The noble Baroness, Lady Helic, has already mentioned roaming paramilitaries, and there is corruption.  Kosovo suffers from high unemployment and emigration, and it will depend on foreign aid for years to come. The US is definitely committed to Kosovo and KFOR, and I believe that we too have a moral commitment to support its EU application, alongside Serbia’s, and ensure that the US does as well.
Georgia, Ukraine and the Baltic states are on the front line of the new Cold War. In the case of eastern Ukraine, this is an active war in Europe, in which thousands have died and are still dying. You have to believe that, whatever the chaos in the White House, the US Administration is following this scene closely through NATO and its generals on the ground and yet, to judge from recent evidence to the Foreign Affairs Committee, NATO is way behind Russia in its preparedness for conventional warfare. We also have to assume that, while we remain in the EU, the US is behind us in supporting democracy and the rule of law in eastern Europe.

Lord Cope of Berkeley: My Lords, this has been a wide-ranging debate instituted very well by the noble Lord, Lord Ashdown, to whom we are all grateful. As one or two others have done and the noble Lord, Lord Turnberg, just did, I want to concentrate on a decision that throws light on the activities of the United States. That is the recognition of Jerusalem as the capital of Israel.
My interest, as I have outlined before, is that my wife was the third generation of her family to be born in Jerusalem, having gone there for Christian reasons in Ottoman times. The family still has interests and friends on all sides of the religions and confessions there. The noble Baroness, Lady Tonge, pointed out that over that period we British failed to protect the existing inhabitants of Palestine as Balfour’s letter promised. We also failed to prepare Palestine for independence, as we were required to do under the mandate. Now we find ourselves facing problems there again.
It interested me that the noble Lord, Lord Turnberg, made such a clear distinction between east and west Jerusalem and suggested that east Jerusalem, in spite of the statement by the President the other day, might indeed be the capital of Palestine. He is right to concentrate on the Old City as the focal point. Every effort to settle the problems of these two countries by partition, from the Peel commission in 1937 to UN resolutions over the years, has recognised the inescapable fact that the status of Jerusalem needs to reflect its importance to Jews, Muslims and Christians if peace is to be secured and to last. Of course, it would be easier to be consoled by the remarks of the noble Lord, Lord Turnberg, if one did not also know of the tremendous pressure put on the residents of east Jerusalem by the Israelis through residence restrictions, movement restrictions all the time, building restrictions and the building of settlements in east Jerusalem, which has been going on ruthlessly for many years and which continues to this day.
It is significant, particularly in the context of this debate, that we and other western democracies have not followed the United States in this initiative. The noble Lord, Lord Ashdown, hoped that in the United  States democracy might help to curb the excesses of Donald Trump, and we all hope that. However, we the allies of America also have a duty in this respect not necessarily to follow all his policies over the years and to lean out of the boat in the other direction.
The damage that was done by the statement on Jerusalem was, first, a blow to the United Nations and its resolutions and the rules-based order that the noble and gallant Lord, Lord Houghton, referred to in his excellent maiden speech, as did other noble Lords. The statement is also a blow to the idea that America might be a broker between Israel and Palestine, as previous US Presidents have done their best to be. I am particularly sad about that because for a brief period last year, when American policies seemed to be developing, particularly in the Gulf, Saudi Arabia and so on, it seemed that the great dealmaker, as he is said to be—at least by himself—might open up new possibilities of reconciling this stubborn problem. I fear that has become much less likely and less possible.
In the face of US policy, we in this country, with our other allies in Europe and elsewhere, need to redouble our efforts to try to bring peace in Israel/Palestine but also in other parts of the world, not just sit back and bemoan what is happening. Of course, many Israelis and Palestinians want to get on with one another. Those are the people we should help, while doing our best to marginalise the zealots on both sides of this terrible divide.

Lord Soley: My Lords, I always look forward to these debates because I learn so much from the contributions made, from experience, across the House—particularly today from the noble and gallant Lord, Lord Houghton, who made an interesting speech containing some interesting concepts, which will bear rereading.
I also thank the noble Lord, Lord Ashdown, for introducing this debate in the way he did. I do not share his slightly doom-and-gloom approach. I recognise his attempt to use the historical perspective of the 1930s, but I would have thought that pre-1914 is more relevant. One great power, the United Kingdom, was in relative decline, and now another, the United States, is in relative decline—the emphasis being on relative not absolute decline, which are two very different concepts. But I accept that the position is changing. Of course, there is also our own decision to leave the European Union.
None of these things will necessarily mean that there will not be great collaboration between the key western democracies and countries. Following the Brexit referendum, we must stay close to Europe and get closer on defence and foreign policy. In my judgment—indeed, this is said within the European Union at the moment—there will be greater co-ordination of defence and foreign policy in the EU. The United Kingdom ought to support that. We have to work in tandem with that, and our relationship with both the EU and the US will be—to use that hackneyed term—a special relationship: it has to be really close. We must acknowledge that the United States will, in due course, have to relate more directly to the European Union and less  via the United Kingdom. That is one of the political consequences of leaving the EU. It is not necessarily totally disastrous. Although we should have stayed, and I voted to stay, I do not take the view that we cannot make this work, as long as we see our relationship with the European Union as being a close one.
I also emphasise what has been my view for some time: that the European Union is at best two-speed and maybe even three-speed in its approach to emerging economic and political integration. Some countries in Europe will head ever closer towards economic union and the political union that necessarily goes with that—if you have closer economic union, you inevitably develop a political union—and we will be slightly outside that, in the second or third tier of that process. That is not necessarily a disaster. It is not the best place to be in, but we can make that work if we recognise that we have to be very close and have a good working relationship politically and on the economy, defence and foreign policy. That is why I share my noble friend Lord Robertson’s view that we have to put the Foreign Office at the forefront of our activities. We must also consider our soft power in all its aspects, including our help to developing countries, which my noble friend Lord Judd mentioned. All those things will continue to be part of Britain’s influence. But our language, culture and history make it clear that relationships with the EU and the US will not necessarily diminish. The relationship between the UK and the US is not all about the President and the Prime Minister; it is about the incredible, multilayered British and American contacts—family, business, politics, academia, science and technology—that keep us close. That has to be a key part of this.
The contribution of the noble Lord, Lord Lamont, on Iran was important and good. We need to focus more on the role of Islam. In my lifetime we got used to a political ideology dominating the world—communism, capitalism, Nazism, fascism, and so on. That has gone and is being replaced by a religious ideology, and, frankly, that has been the history of the world for several thousand years.
The disputes in Iran and the riots in the streets are in part about the problem Iran has in marrying political control—President Rouhani is struggling but he is trying to do a good job—with religion: according to both Shia and Sunni interpretations, there is no law above God’s law. Time precludes any further examination of that issue but we have to focus on it in the coming decades.
Finally, we also have to be aware of the role of nationalism, which I am afraid is growing in many countries in the world. That, combined with the growth of ideology, is a danger we have to face.

Lord Kerr of Kinlochard: My Lords, I am grateful for the chance to speak in this debate, in which I have the unusual pleasure of agreeing with every word said by the noble Lord, Lord Lamont of Lerwick.
I will make two quick points. First, this is a brilliantly timed debate, one year after the inauguration. I am less worried than I was then about the threat to  NATO. The investigations into possible collusion and certain Russian involvement in the election campaign in America have neutralised what I saw as the biggest risk to NATO: candidate Trump’s openly avowed admiration for President Putin. If that is still in his head he cannot act on it, given the investigations taking place on Capitol Hill and elsewhere in Washington, so I am slightly less worried about that.
One point that perhaps was not brought out in the debate, and about which I am more worried about than I was a year ago, is the threat to the rules-based trade system. The open insistence that the United States will no longer be bound by WTO rulings, and the attempt to subvert the WTO system from within by refusing to make appointments to panels—refusing to appoint judges in the WTO’s dispute settlement procedures—is an existential threat to a central element of a rules-based system that originated here in London. We invented the General Agreement on Tariffs and Trade. The WTO was run for a very long time on British expertise. When we joined the European Union we imported the old Board of Trade expertise into it and we saw great commissioners such as Leon Brittan and Peter Sutherland. We should pay tribute to Peter Sutherland for all his work, not just in Brussels but also in Geneva, in all our interests.
It is very important if we are to leave the European Union that we remain in very close touch with it in support of the WTO system. To my mind, a sweetheart trade deal with the United States is a mirage. It clearly has an “America first” policy. We remember the inaugural speech. We must not let pursuit of close contacts with America, which are very important, blind us to the fact that the rules-based system is particularly important to an open trading country such as the United Kingdom.

Lord Wallace of Saltaire: My Lords, this has been an interesting and constructive debate with remarkable consensus across the House. Almost everyone agrees with what the noble Lords, Lord Lamont and Lord Robertson, said about Iran, for example. I hope it does not embarrass the noble Lord, Lord Lamont, that we are very much of one view on that.
There are three interconnected themes: first, the changes in the United States and the impact of President Trump; secondly, how we maintain the threatened liberal international order; and thirdly, the implications for British foreign policy. On the United States, I think most of us agree that the changes to which we have to adjust are longer term than President Trump and that Trump highlights and, we hope, exaggerates some of the underlying trends.
When I first went to the United States in 1962 I began to learn that the Atlantic community was between the east coast of the United States and Britain and western Europe. In those days Texas was not so important; Massachusetts and Pennsylvania mattered much more. Now, California, Texas and Florida are fundamental to American foreign policy and Asian-Americans and Latin-Americans are as important as the old, white Anglo-Saxon Protestants were. The discontented white Anglo-Saxon Protestants form part of Trump’s core vote.
The special relationship is a great deal less special than it was. I remember in 1967 taking my then-girlfriend, now wife, around Washington with her list of people who had worked with her parents in the war. They all turned out to be senior people either in intelligence agencies or the State Department. For that American generation, that was part of their formation. They had spent four years in European war. That has gone. People in the United States are much more likely now to have travelled somewhere else. They do not instinctively look to Europe. Our consensus, however, is that in spite of President Trump and all these trends, the United States remains the indispensable power for a liberal international order and we need to maintain our governmental and political exchanges with the United States in spite of the blizzard of dreadful Twitter messages.
On a liberal international order, I congratulate the noble and gallant Lord, Lord Houghton, on his maiden speech and the number of very insightful things that he said such as,
“stability and a rule-based global order do not occur naturally”.
We have to fight for them. We have to keep them going. We have to have an active foreign policy with others to maintain it against all the efforts of authoritarian states to undermine it. He also said that a liberal international order has to be a more inclusive world community.
When I hear US Republicans talking about the importance of Winston Churchill I remember that the Atlantic charter, the basis for a liberal international order, was mainly written by Roosevelt and his assistants and signed by Churchill. US Republicans have scrubbed Roosevelt completely out of the picture. They like Churchill as a great world leader but want to shunt Roosevelt off because he believed that welfare and freedom from want—other dimensions of democracy—were equally important.
It is important that we remember that because globalisation, as we have discovered in the past 30 years, spreads inequality into our countries and therefore fuels populism. I remember reading an excellent book by the Harvard economist Dani Rodrik, in which he says that globalisation may not be compatible in the long run with democracy and, if we have to choose, we have to choose democracy.
That is a matter for another debate but it raises some very awkward questions for those such as the noble Lord, Lord Howell, who are quite fond of a network world. When many of those who use the network come from corrupt and authoritarian regimes and launder their money through London and elsewhere, it is not easy for us to maintain our liberal values, let alone spread them further out.
Then we come to the implications for British foreign policy. I feel a degree of underlying uncertainty as to what British foreign policy is. In his best diplomatic way, the noble Lord, Lord Ricketts, suggested that he was not entirely sure what “global Britain” means. That confusion is shared by all of us. It is rather like “deep and special” and “strong and stable”. It is a very convenient phrase to use when you do not want to explain what you mean, and that is part of the problem with British foreign policy today.
The underlying concern was expressed strongly by the noble Lord, Lord Robertson. He mentioned the,
“savage amputation of our international diplomatic capacity”,
cutbacks in the Foreign Office, our embassies and the Diplomatic Service, and a loss of direction in our foreign policy as such.
Winston Churchill, after all, defined British foreign policy as being based on three circles—the transatlantic, the European and the Commonwealth. We are presently disengaging from the European circle, without yet any information from the Government as to how we will maintain that relationship after we leave the European Union. We operate our diplomacy through 40 working groups underneath European common foreign and security policy. I am told that during the Arab spring the Political and Security Committee, in which we take a major part in Brussels, met almost daily for several weeks and the number of Foreign Ministers’ Councils was sharply raised.
I am also told that the British and the Germans are the ones who most regularly send diplomatic messages round within the European Union. We will cut ourselves out of that unless we come to some other arrangement. The Government have so far said nothing on that, except that we had a position paper last September which in detail told us how much we had gained in foreign policy and defence co-operation over the last 30 years precisely from this co-operation with our European partners. On the importance of British-French defence co-operation, I would say to the noble Lord, Lord Ricketts, that when I was in the coalition Government, I was well aware that Liam Fox was making active efforts to ensure that as few people as possible knew how important Franco-British defence co-operation was. That was not very helpful and part of the problem that we face. There is a gap between public understanding and the analysis of where we are.
For the past 40 years, we have worked through all that. The noble Lord, Lord Lamont, remarked on the importance of EU3 on Iran. It was extremely effective, together with the high representative—the noble Baroness, Lady Ashton—and it is not clear how we will maintain that either. We will not meet our opposite numbers as easily, regularly and naturally as before, so we will have to find some new arrangement that is so far undefined.
The day before yesterday, a number of noble Lords complained that they had not understood that Europe was a political project. Of course it was a political project. It came out of the last major war. It was a project to provide European security and—as Mrs Thatcher used to say, including in her Bruges speech—to extend democracy. We have extended it successfully across eastern Europe.
The uncertainties of British foreign policy should concern us all. I listened to Boris Johnson’s speech in Chatham House in December 2016 in which he announced that it was the first of a series of speeches that he would make on the redefinition of the strategy of British foreign policy. I have searched several times since then—I asked the Library to assist me—to discover which speeches he had since made on the strategy of British foreign policy. I regret to tell the Minister that I  have been unable to discover them, and so has the Library. Perhaps he could help me and even provide a list of those speeches for other noble Lords who have contributed to these debates.
The consensus across the House about British foreign policy seems to be entirely clear. The United States remains important. France, Germany and other European actors are also vital. The Commonwealth is an asset, although we should not overplay what sort of an asset the Commonwealth is. But we do not quite know what the Government think on all this, least of all how they will maintain the European circle alongside the American circle after we leave the European Union.

Lord Collins of Highbury: My Lords, I too thank the noble Lord, Lord Ashdown, for initiating this debate, which has been wide ranging and important. One of the good things about House of Lords debates on subjects such as this are that we are not confined. We hear from a wide range of expertise on a number of subjects. I particularly welcome the excellent maiden speech by the noble and gallant Lord, Lord Houghton of Richmond. As the noble Lord, Lord Hennessy, said, he is a welcome addition to our military Benches, and I look forward to his future contributions.

Warrior Benches!

Lord Collins of Highbury: Was it warrior Benches? There you go: that shows the difference between us. I will not go any further.
Trump’s attack today on the free press, backed by Rupert Murdoch’s media empire, is full of irony. Twelve months ago, the Chatham House report on America’s international role under Trump said that his foreign policy path would be hard to predict. It pointed out his fondness for,
“unpredictability—a characteristic long noted as dangerous in foreign policy—and has a tendency towards inflammatory and escalatory rhetoric. He is transactional and short-termist in outlook, has little respect for long-standing alliances and partnerships”.
Twelve months on, Trump started 2018 with a flurry of tweets that sparked protests across the world, caught allies off guard and further divided opinion in Washington. As we heard in this debate this afternoon, he has split the international community and inflamed Palestinians when he recognised Jerusalem as Israel’s capital by moving the embassy. He then threatened to punish those who voted against the move at the United Nations General Assembly by cutting aid.
I say all this because the excellent contribution from my noble friend Lord Robertson was a telling point about this debate. We need to focus on the reactions to these things, not just what Trump intended. There is a positive reaction. It causes us to focus on what we have and the important things that we value. Trump’s own view of his first 12 months was to praise his own Administration for victories against ISIS in the Middle East and for bringing unprecedented pressure to bear on the North Korean regime. The national security strategy unveiled in December also labelled Russia and China among the chief challenges facing the US, despite Trump’s overtures towards their leaders. That has been reflected in today’s debate.
Ryan Crocker, the former US ambassador to Iraq and to Afghanistan, who served both the George Bush and the Obama Administrations, said:
“Other than the neo-isolationism I do not think there is a pattern to his foreign policy … I think he is purely reactive”.
But our reaction must be about what that vacuum is creating. That is the important role of Britain internationally in supporting a rules-based system and human rights. In our debates on the Sanctions and Anti-Money Laundering Bill this week, I was pleased that this House focused on the importance of championing human rights, which will be at the core of our activity.
Another consequence of Trump’s actions over the past 12 months has been the deep cuts to the State Department budget and the dearth of high-level diplomatic appointments—the failure to make key important appointments. As my noble friend Lord Robertson reflected, we have also seen cuts to our foreign and diplomatic services which will impact on our ability to fill that vacuum. There is no doubt that Trump’s lack of interest in established diplomatic protocols has put a strain on the close relationship between No. 10 and the White House. However, as the noble Lord, Lord Hennessy, pointed out, UK national security strategy is largely designed to work this special relationship from force structure to intelligence sharing. It is critical.
On Trump’s “America first” agenda and the new national security strategy published at the end of last year, we have heard, as the US National Security Adviser Lieutenant-General HR McMaster said last year, that “America First Doesn’t Mean America Alone”, and that the US would continue to work closely with allies in pursuit of a global leadership. That is another key element of today’s debate. We have the rhetoric and the tweets, but we also have effective co-ordination at a range of levels in our special relationship, which is something that we should not miss.
The highest priority in the strategy was given to the protection of the American homeland from attack. Another overriding theme was a focus on American prosperity as the core national security goal. I welcome the contribution of the noble Lord, Lord Kerr. He is absolutely right that there is an additional threat to the rules-based system, which is about trade. Trade has become one of the key focuses of President Trump. It fits in well with the presidential election narrative targeted at the working classes in the US with growing concerns about stagnation and declining competitiveness. I will return to this theme at the end of my speech.
One of the things we have seen in the excellent House of Lords briefing that we had for this debate are Professor John Bew’s observations that one can see subtler themes in the strategy that McMaster highlighted. They are talking about peace through strength—a conscious sort of reminder of the Reagan era, reflecting Trump’s demands for more effectiveness and utility in the international game. McMaster is also keen to stress that the US will expect reciprocity from its allies in terms of supporting NATO for example, as we have heard in this debate.
From our point of view there are synergies in terms of our concerns, particularly about the security challenge posed to American interests referred to in its national  security strategy, and to its allies by Russia. From our point of view, that also links to cyber and the policing of the internet, which is becoming an increasingly important aspect, not only of defence issues but of defending our liberal democracy and the values that we have talked about.
The Doug Stokes article in the latest volume of International Affairs, published by Chatham House, said that Trump’s administration,
“combines elements of isolationism with cost-benefit bilateralism and, most strongly of all, a deep ambivalence towards the liberal international regimes that America has helped bring to birth and sustain since the end of the Second World War”.
But I think what I have heard in this debate is that our special relationship with the United States is not about one man; it is about our common heritage, our shared values and democracy. It is important to reflect on that. Our focus on that relationship cannot just be seen in terms of that individual relationship; it must be seen much more in terms of that soft power that we have been talking about, and certainly we had an excellent debate in this House on the report of the Select Committee on soft power. I think it is still worth reading that report because it focuses on a number of key issues. I think, for peace and security, our relationship remains very important. As James Landale of the BBC put it:
“It is almost as if the Trump modus vivendi has made it even more obvious that the transatlantic relations that matter are the historic state-to-state contacts between the different agencies of government rather than the personal relations between individual leaders”.
The noble Lord, Lord Howell, said it absolutely perfectly. We have new networks that are developing. We need to reach out to those networks, and not only new networks of countries. One of the things that Trump’s campaign has taught us is that there are new means of communications. As a foreign policy objective, we should reach out not only to all politicians but to civil society, because that is how we maintain our liberal rules-based organisations in the world. Reaching out through new media and new contacts—that is what our soft power should focus on.
I commend the debate and I conclude by thanking the noble Lord for initiating it, but it is not the end and the last word. This debate will continue over the next three years of Trump’s Administration.

Lord Ahmad of Wimbledon: My Lords, I first join all noble Lords in thanking the noble Lord, Lord Ashdown, not just for tabling this debate but for introducing it in a very informed and thoughtful manner. He appropriately set the tone demonstrated by all contributions to this excellent debate, which is well-informed and again reflects the best of your Lordships’ House in terms of expertise on a wide range of issues.
It would be entirely appropriate at this juncture to welcome the noble and gallant Lord, Lord Houghton of Richmond, to his place. In his first excellent speech, he said he would be non-controversial. Drawing a military analogy, he was non-combative in that sense as well, while the noble Lord, Lord Hennessy, welcomed him to the warrior Benches. It is for me, on behalf of  the Government, to welcome him to all Benches. He is a valuable addition to the House and I look forward to working with him across the months and years.
For over a century, the most important and epoch-defining international partnership has been, as noble Lords have acknowledged, between ourselves and the United States of America. It is an alliance that has overcome tyranny. It has championed rules, rights and freedoms that have transformed lives and livelihoods, both within our borders and beyond. The noble Lord, Lord Judd, also pointed out the excellent relationship we have enjoyed at the United Nations and the important role we have played with the United States in the UN as a P5 member. Let me assure all noble Lords, including the noble Lord, Lord Judd, that the UK is committed to further strengthening the rules-based international order and international organisations such as the UN, which have been central for this rules-based system for the last 70 years. Indeed, before Christmas we worked with the US and other partners to secure General Assembly resolutions in support of the UN Secretary-General’s current plans for reform efforts within that organisation.
Together, we have a rules-based international system within which we work closely with the United States and other international partners. This system, albeit imperfect, has enabled a period of relative stability and prosperity that we have never seen before. We stand together with the United States—and with Europe—in facing a resurgent Russia, an assertive China and new forms of threat across the world. We have shared great successes, for example in the fight against Daesh, in close co-operation on intelligence issues—as the noble Lord, Lord Hennessy, pointed out as part of our “Five Eyes” alliance—and bilaterally and in our shared commitment to NATO, reflected on by the noble Lord, Lord Ricketts.
I am confident therefore that we need no further persuasion, as we have all agreed, whatever perspective was drawn in this debate, of the United States’ continued importance to UK interests; nor of the pivotal role the United States will continue to play for many years to come, as pointed out by my noble friend Lady Helic, among others, in shaping the way the world deals with a host of issues that are fundamental to us. Whether we are dealing with the challenges of North Korea, or—as the noble Earl, Lord Sandwich, pointed out—closer to home in the Balkans, the USA has a close role to play. In that respect, I say to the noble Lord, Lord Wallace—we talked about global Britain and the three circles—that, yes, there are times of challenge in the UK-US relationship, but it remains, as all noble Lords have acknowledged, a constant, constructive dialogue; from engagement across the board at working level to regular calls between my right honourable friend the Prime Minister and the President. The strength of that relationship means that we are willing and able to have frank discussions with each other when we disagree, and rightly so for each ally.
The President has set a new direction for US policy, as many noble Lords have set out today. There are issues of difference from us, as the noble Baroness,  Lady Falkner, pointed out. On climate change, not only have we been strong, we have continued to work with other international partners. My noble friend Lord Lamont pointed to the Iran nuclear deal and I can assure him that we continue to work strongly with our European Union colleagues, and the EU3 in particular, in ensuring that deal stays alive, while not missing an opportunity to ensure that the United States also continues to support that important deal. Multilateral trade agreements and the Middle East peace process, which I will come to in a moment, have been areas where we have differed from pronouncements made by the Administration. Notwithstanding differences, however, we continue to work very closely alongside the Administration on all these issues, as friends, as allies and, as my noble friend Lord Howell aptly put it, as partners in this relationship. We do not agree on everything but divergence from particular US foreign policies is nothing new for the United Kingdom. British Governments of all political colours have at times found themselves at odds with some aspects of US foreign policy. On major post-war issues such as Suez or Vietnam, the US and UK did not agree. The Thatcher/Reagan years are often cited as a high-water mark in relations between our two countries, yet even they were not always aligned on every issue.
Turning briefly to Iran, my noble friend pointed out that this is an important relationship to retain. I acknowledge his important efforts in this regard but I also reassure him that the recent visit by my right honourable friend the Foreign Secretary to Iran was a dialogue that was both constructive and raised issues of mutual importance. Yes, we are encouraged by some of the pronouncements made by President Rouhani, particularly with some of the challenges and protests we have seen on the streets of Tehran. As we move forward, there are important parts to this relationship: good co-operation with the Trump Administration is important. For each of the policies on which we disagree there are many more we  agree on.
I shall reflect on some of the points made by noble Lords during this debate. The noble Lords, Lord Ashdown, Lord Judd and Lord Robertson, spoke very poignantly of the importance of soft power. Indeed, on reflecting in preparation for this debate I was reminded that Portland Communications recently did a survey of soft power which included government assets, but also the private sector and its representations across the world—we were second on that list. That does not mean that we rest on our laurels. I saw, in my time at the Foreign Office, the important role the British Council plays. We heard from the noble Baroness, Lady Falkner, about Chatham House; I might add Wilton Park to that list. The noble Lord, Lord Ashdown, pointed out some of the challenges. He talked of population growth being a focus of foreign policy initiatives. Perhaps he should have a conversation with my right honourable friend the Foreign Secretary, who mentioned that very term but also the solution, which he feels equally passionate about. I am sure it reflects the sentiment across your Lordships’ House, about how that can be dealt with. The noble Baroness, Lady Tonge, touched on educating and  empowering girls and women as part of the solution to some of the challenges that we face. Girls’ education is at the centre of that.
The noble Lord, Lord Hennessy, talked about our vital relationship with the US in intelligence. The US is a long-standing ally and I know from my time as Aviation Minister and as Minister for Countering Extremism the vital work we have done in sharing intelligence and averting terrorist incidents—those impacting our streets here in London and across the world, and those in the aviation sector. Equally, I assure the noble Lord that we work exceptionally closely with our European partners on intelligence sharing, joint operational work and sharing our experience of developing threats. It is our view that close co-operation will continue regardless of the UK’s future relationship with the European Union after Brexit.
The noble Lord, Lord Anderson, again talked about a differential with the withdrawal of aid to Pakistan. The UK and Pakistan have shared an interest in the battle against terrorism and we regularly highlight to Pakistan the importance of taking effective action against all terrorist groups: it is a constructive relationship that we believe in. The noble Baroness, Lady Tonge, my noble friend Lord Cope and the noble Lord, Lord Anderson, among others, touched on the Middle East peace process and particularly the recent pronouncement by President Trump recognising Jerusalem as the Israeli capital before any final status agreement. Let me be clear: the British government position has not changed—east Jerusalem is regarded as occupied Palestinian territory. It is our belief that the prospects for peace in the region were not helped by the pronouncement. It is important, however, to look forwards. Therefore, as the noble Lord, Lord Turnberg, also pointed out, the second part of that speech focused on the continued commitment to a negotiated two-state solution. It remains the view of the British Government that a shared Jerusalem is the way forward: a shared Jerusalem for Israel and a shared Jerusalem in the context of a viable, sustainable Palestinian state.
I turn to the global Mexico City rule that the noble Baroness, Lady Tonge, raised. It is clear that we will not agree with the US Administration on their policy, but let me assure her that the UK remains one of only a handful of international donors willing to tackle this highly sensitive issue. My noble friend Lady Helic touched on the important issues of Burma and Syria. She recognises, of course, the important work we have done, both at the United Nations and more recently at the Human Rights Council, in ensuring that this important issue—the displacement of close to 1 million people, as she so aptly and poignantly put it—is kept at the forefront of all people’s minds. I assure her that we are working very closely with the United States in this. As I have already alluded to, we continue to work closely with the United States on action against Daesh in Syria and Iraq. We will continue to work closely on this with our European partners.
My noble friend Lord Taylor talked about the importance of Israel, both in the context of the Middle East peace process and more generally. I assure him that the UK enjoys strong and growing relations with  Israel, built on decades of collaboration across a range of fields, including education, business, arts and culture. That also provides us with the strength to ensure that we can have very candid conversations when we disagree. My noble friend asked specifically about trade envoys. I agree with him that they play a vital role in promoting UK trade. The Department for International Trade, which is responsible for overseeing our network of envoys, will announce any new changes as appropriate.
I recognise, as the noble Lord, Lord Alton, put it, that we also continue to deal with the US further afield. He mentioned North Korea, appropriately. I assure him that we are continuing to work very closely with the US to put maximum pressure on North Korea to change course and enter negotiations to eliminate its nuclear and ballistic missile programmes. Through the UN Security Council we have imposed increasingly tough sanctions to cut off the revenues that fund these illegal programmes. My noble friend Lord Lamont mentioned the use of sanctions. I am fresh from the Report stage of the EU sanctions Bill, which we finished yesterday and which will allow us the flexibility, through the domestic sanctions policy that we will have, to continue to work with our partners to ensure that we can impose sanctions as and when necessary. The noble Lord, Lord McNally, raised the importance of the relationship that every Foreign Secretary has had with the US Secretary of State and he talked about his own experience. I assure noble Lords that the Secretary of State, Rex Tillerson, and my noble friend Boris Johnson enjoy a very close, co-operative, productive and constructive relationship in this respect.
As we look forward, one of the areas which has been raised concerns the United States and the European Union. An oft-repeated characterisation, which noble Lords touched on, is our relationship with the US and how it frames our exit from the European Union—a choice between the US or the EU or between Europe and the world. As many noble Lords acknowledge, these are false choices. Yes, we are leaving the European Union, but our national interest will continue to be aligned with the interests of our European neighbours. We are still part of that continent, we still continue to enjoy strong relationships, particularly on security and our economies. I agree wholeheartedly with noble Lords including the noble Lord, Lord Wallace, who implore us to continue to do more work with Europe. We will do so but our departure from the European Union will not change the reality that global problems will require global solutions. They will require partnerships and we will always need to work with countries both near and far.
We continue to work on our relationship with European partners. As the noble Lord, Lord Ricketts, pointed out, you need only turn on the television today to see a summit taking place which underlines our close proximity with one of our closest neighbours—the closest if you look east—and that is France. The Anglo-French summit taking place today with President Macron again underlines the importance of our relationship across many areas, including stronger economies, our defence relationship and other areas of mutual interest. We will continue to work on  those relationships. At the G7 summit in May the Prime Minister took the lead on engaging the US and European countries to co-operate on countering online extremism. That remains a priority on which we work collectively with our European partners.
The noble Lord, Lord Robertson, talked about soft power. If we look down the list of countries, as I said, we are second only to France. Interestingly, the United States ranked third in that survey. The noble Lords, Lord McNally and Lord Wallace, also talked about trade and the definition of global Britain. Let me assure the noble Lord, Lord Wallace, that the three circles remain alive and well. They are very prosperous.
As Minister for the Commonwealth I am sure that all noble Lords are looking forward to the Commonwealth Summit and Heads of Government Meeting in April. It will not replace the European Union or the UN, but it is an incredible network. My noble friend Lord Howell speaks passionately, and rightly so, about the Commonwealth relationships. We enjoy similar legal systems, education systems and languages. It is important we leverage those across the four important areas of sustainability, security, prosperity and fairness. I look forward to working with noble Lords in strengthening our role across the Commonwealth.
The noble Lord, Lord Robertson, talked about the FCO budget. I can assure him that, in the government spending review, the FCO’s non-ODA budget was fully protected. As we have also heard, we are working in closer alignment with colleagues in DfID, through common-aligned objectives in our development policy. Indeed most recently, along with Defence Ministers and the Secretary of State for International Development, we launched a new document looking at women, peace and security around the world and at our international partners. The document underlines the importance of global Britain in that area. Let me reassure the noble Lords, Lord Robertson, Lord Ricketts, and Lord McNally, about the role of the FCO in its diplomatic efforts and its embassies, which play an incredible role together with our high commissions. That will continue to be the case.
The noble Lord, Lord Hylton, asked questions about national resistance movements and sanctions against Syria. On the latter, without going into too much detail, those sanctions will remain in place with the regime until we see a move away from President Assad. On resistance movements, I think history tells us—albeit depending on what the notions and government structures are—that the first and primary objective must be that they must cease violence. They must put down weapons and recognise those around them as legitimate partners towards peace. I will write to him specifically on the observations he made.
My noble friend Lord Howell, among others, raised the important issue of changing global relationships. We can talk of relationships with China or India, and the Government continue to strengthen our work in this respect. As my noble friend pointed out, technology advancement, changing positions, population growth, changing dynamics, businesses, education—all these things are changing the world. That is what global Britain is all about: repositioning ourselves to ensure  that we strengthen the new relationship we will have with the European Union; strengthening and continuing to build on our relationship with the United States; and recognising—through the Commonwealth and other bilateral relationships—the importance of building and developing prosperity, trade and relationships across the world.
The noble Lord, Lord Kerr, spoke in the gap, quite rightly, on the concept of trade and touched on the WTO. Let me assure him that the UK will remain steadfast, notwithstanding any challenges, as a champion of free trade at the WTO and in establishing the UK’s future independent trade policy. As we leave the European Union, we will continue to work closely with WTO members, including the US, to ensure a simple, fair, transparent transition for all parties, that minimises disruption to our trading relationships with other members.
In conclusion, the UK Government have engaged historically, and will continue today and in the future to engage, with the US Administration, issue by issue, policy by policy. It is a strong, productive, important relationship, and we will continue to work as we have always done. We will use every tool of friendly co-operation and influence to persuade the US Administration of the benefits of working for our common interests. That allows us to have those candid conversations when we disagree. As we have always done, we will continue to cherish and nurture our close relationship with the US. It is a relationship based on shared history—as the noble Lord, Lord Collins, said—and on shared fundamental values and shared interests. It is a relationship that transcends personalities and party politics—a relationship that matters hugely to both our countries, and which has been a driver of peace and prosperity for many, many decades. This relationship is as important today as it ever was before. In an age of geopolitical turbulence and uncertainty, it is a relationship that I believe—and I am sure it is a sentiment expressed by all noble Lords—will endure the test of time and endure long into the future.
Finally, I once again thank the noble Lord, Lord Ashdown, and all noble Lords who have contributed to this important debate. As ever, as a Minister responsible in this House for foreign affairs, I am for ever enlightened and informed.

Lord Ashdown of Norton-sub-Hamdon: My Lords, I shall of course not detain the House for more than a handful of sentences. That was a very high-quality debate—I know we always say that, but it really was. I listened to it intently and learned from it a lot. I make two comments, very briefly: I noted the point of the noble Lord, Lord Soley, that I was being too pessimistic—this was not the 1930s, it was 1914. I am not sure that I draw a huge amount of comfort from that, but there we go. I was moved to be described by the noble Lord, Lord Howell, as charmingly old-fashioned. No one has ever said that about me before, and I shall relish it, coming as it does from the noble Lord. It has been a privilege to lead this debate, and I beg to move.
Motion agreed

Legal System: Prosecutorial Policy
 - Question for Short Debate

Lord Morris of Aberavon: To ask Her Majesty’s Government what assessment they have made of the extent to which the legal system does justice to alleged victims in the commencement of prosecutions, the disclosure of evidence to defendants, and the relationship between the Crown Prosecution Service and the police authorities.

Lord Morris of Aberavon: My Lords, I hope this debate is timely, given the almost daily reports of difficulties in sex-case trials. I have spent over half of my adult life at the criminal Bar, and I am deeply aware of the necessity to respond to the needs of justice as problems arise.
When I became Attorney-General, the CPS was in a mess on a number of issues. I invited a distinguished retired judge, Lord Justice Glidewell, to chair an inquiry in which the noble Lord, Lord Dear, played an important part. I am not suggesting there is a need for such a broad inquiry now, but some particular aspects of prosecution require some form of independent review.
The Attorney-General, by statute, supervises the CPS. The House was told last week by the Minister that the practice of him meeting the director frequently and regularly continues. I was glad of that assurance. In my time, the directors would come to discuss problems in individual cases, and particularly those which might be of interest to the public. In most cases, the decision to prosecute was taken by the directors but, in the cases raised, it was of mutual assistance to discuss problems; I hope that, as a senior criminal law practitioner, I was of assistance in the delivery of justice.
I hope the decision in the Worboys case to prosecute only 23 counts—and, of those, only a single case of rape—was discussed with the Attorney-General. I fully understand the rationale of selecting only the best cases to prosecute. However, the machinery to ensure that the victims—including more than 100 other women, according to the police—knew the reasons for non-prosecution in their cases is crying out to be revisited. I have no comment to make on the sentence involving one allegation of rape.
The trial judge, the late Mr Justice Penry-Davey, whom I knew well, had wide experience of criminal law and more. It seems that the sentence was within the guidelines of the time. Had more cases been brought before the court, the sentence might well have been considerably more; the full gravity of the alleged offending would have been understood and dealt with in a sentence.
The victims are concerned about the decision of the Parole Board to release Worboys. Their particular concerns are, first, about how they found out and, secondly, about the conditions on his release. Only one victim was consulted. The Parole Board is an independent body and operates according to its own rules. The Parole Board chairman blames the Justice Secretary because the victim contact service is tasked to do that. It may be revealed in the course of court proceedings  whether the Parole Board Rules were carried out. Is there a precedent for a Minister to apply for judicial review of the board’s decision? As the board is financed by the Government, and probably by the Ministry of Justice, I wonder what the precedents are. I trust that the Government will get better legal advice than they did when they appealed to the Supreme Court on Article 50.
Mr Brandon Lewis MP, now chairman of the Conservative Party, has been criticised by Sir David Latham, a former chairman of the Parole Board, as being irresponsible in his remarks. I tend to agree. If the Minister is advised to proceed on judicial review against the Parole Board, the Parole Board itself will then have to consider its position. I advise the Minister to proceed with caution.
I have nothing against Mr Nick Hardwick, whose board has a most difficult talk. It needs only one of these prisoners to go wrong to bring the whole edifice into question. I understand that only 1% do so. I hope that, in the discussions, the representations made on more than one occasion by the noble and learned Lord, Lord Brown of Eaton-under-Heywood, about prisoners with indeterminate sentences are not forgotten.
Mr Hardwick has previously chaired the Police Complaints Commission and been Chief Inspector of Prisons. It has been noted that some gentlemen—and ladies—move seamlessly from one quango to another. Looking at it broadly and philosophically, and not being personal, might it be time for the Cabinet Office to consider whether a much wider pool of talent should be looked at, rather than playing for safety in public appointments and moving pieces around the chessboard? Mr Hardwick now wants more transparency; I wonder whether this was considered at the time of his appointment. I have looked at the Parole Board Rules and they are easily amendable by regulation.
The second issue is the disclosure of evidence which might help the defence and undermine the prosecution. When I recently questioned in the House whether we had gone backwards since 1997 in the practice of disclosure, the Minister blithely assured the House that we had not. I would be fascinated to read his brief on this point. The reality is that, with the growth of social media and the use of mobile phones, the volume of evidence to be considered has grown immensely and made the task of disclosure much more difficult. Might not the downloading of material from mobile phones during the period of alleged offending always be flagged up and specifically considered? Nevertheless, the need to disclose in the interests of justice is still paramount. Last Friday’s press reported that, after the collapse of Mr Allan’s trial and similar cases, the police in London have been issued with a new communications assurance policy to ensure full compliance. I find the Minister’s assurance to the House now even less persuasive.
The recorder, Mr Bruce Houlder QC, previously head of the court martial and a very experienced prosecutor in his time, believes that something is seriously wrong with the process of disclosure. It is not a new problem. In July 2017, the joint report of Her Majesty’s Crown Prosecution Service Inspectorate and Her Majesty’s Inspectorate of Constabulary warned the CPS about  the widespread failure to hand over important evidence, and highlighted six cases of failure and called for action. Given the Attorney-General’s supervisory responsibility, I have two specific questions. First, when did the Attorney-General last discuss with the prosecuting authorities the issue of non-disclosure? Secondly, was the joint report to which I have referred discussed, and what action was taken?
There have been many cases reported recently, I fear, but going back a little to 2015 and the case of R v Salt, the then Lord Chief Justice, the noble and learned Lord, Lord Thomas of Cwmgiedd, offered guidance in a case where there were difficult counterbalancing pressures, referring to,
“where continuation would offend the court’s sense of justice and propriety or would undermine public confidence in the criminal justice system and bring it into disrepute”.
We are told that the Metropolitan Police is reviewing 30 other cases with the CPS. The role of the police in disclosure is crucial. That is the beginning. We look forward to the publication of this review. The problem seems to be much wider than the detective constable in Allan’s case. We need something more independent, from top to bottom, to ensure, in the words of the noble and learned Lord, Lord Thomas of Cwmgiedd, that there is no further undermining of public confidence in the criminal justice system.

Lord Beith: My Lords, I am delighted to follow the noble and learned Lord, Lord Morris, and appreciate his wisdom in bringing this matter before the House—although I am slightly embarrassed to be sandwiched between two such experienced practitioners as the noble and learned Lord and the former Lord Chief Justice, the noble and learned Lord, Lord Thomas. I will refer briefly to each of the three propositions that the noble and learned Lord, Lord Morris, set out in the Question he put before the House.
Does the system do justice to alleged victims? There are many ways in which it does not, but I ask, in particular: is there is a danger that not all the cases which could meet the evidence test are taken to trial because of the pressure on police or CPS resources, or perhaps because there is a wish for the trial and the prosecution case to be manageable in court and capable of being absorbed during the process of a jury trial? If that happens, for example, in a case of rape or serious sexual assault, does that lead, possibly, to a lesser sentence than might otherwise have been passed and create the situation that we have seen in the Worboys case? That is the first question that I want the Minister to reflect on.
The second question is: does the failure to meet disclosure requirements harm defendants and, in some cases, victims? Certainly it harms defendants—recent cases have given vivid illustration of that. Defendants have often spent a long period on police bail, during which their reputation and their standing in the community have been severely damaged if not totally destroyed, for a case which does not in the end come to trial or which collapses in court because disclosure requirements have not been met. Of course, it can cause harm to victims as well, partly because it discourages  them from coming forward when they see collapsed cases, and perhaps in some cases because matters which might have convinced the jury of guilt do not go forward because failure to disclose has wrecked the trial by that point.
The inspectorate report to which the noble and learned Lord, Lord Morris, referred was absolutely scathing. It said:
“The inspection found that police scheduling (the process of recording details of both sensitive and non-sensitive material) is routinely poor, while revelation by the police to the prosecutor of material that may undermine the prosecution case or assist the defence case is rare”.
The auditing process was criticised with the comment that it was,
“likely to reflect badly on the criminal justice system in the eyes of victims and witnesses”.
I recently had the experience of doing five weeks on a jury at the Old Bailey. One thing I took away from that was a realisation—that no amount of evidence given to the Justice Committee had fully persuaded me of—of the sheer scale of the disclosure requirements when faced with social media, CCTV, number plate recognition and all the other technical aids which have been so important and, indeed, so valuable in demonstrating guilt in many cases. The quantities of material involved, and the police time taken up before and during the court proceedings, are enormous requirements. They magnify massively the disclosure requirements and the means necessary to achieve what we all seek: namely, the proper and timely disclosure of exculpatory material to the defence. This scale of material clearly calls for a fundamental revision of how disclosure is managed. I hope, again, that the Minister has been reflecting on that in the light of recent cases.
That brings me to the third leg of the question: the relationship between the police and the Crown Prosecution Service. The CPS might well be expected to play a bigger part in trying to make sure that the police do what they need to do—ensure that potentially exculpatory material is found—and that in general this mass of material is properly used.
The relationship between the police and the Crown Prosecution Service is closer than it used to be, with more pre-charge advice. There was quite a movement in that direction a few years ago, which included trying to co-locate the CPS with the police, although I detect a slight pulling back from that because of the fear that the independence of each side could be jeopardised in some way. In this respect I would like the Minister to reflect, with his own considerable knowledge, on whether there are advantages in the system in Scotland, and in some other European countries, or whether those systems pay too high a price in terms of the independence of the prosecutor from the police and vice versa. In Scotland the procurator fiscal and Crown counsel are in a position to direct police inquiries, which is not the case in England. Is the price paid for that the diminution of the respective independence of the two bodies, or is it something we ought to look at? Would it be helpful in trying to ensure that the kind of machinery we now need to  handle these disclosure issues is put in place in police forces and integrated with the Crown Prosecution Service?
All this has massive resource implications and we cannot simply run away from them. The fact that we now have a wide range of material that can demonstrate either guilt or innocence—and is very important in doing so—is something we neither can nor want to change. However, it places much heavier requirements on the system, and I would be grateful for the Minister’s reflections on how that can be dealt with.

Lord Thomas of Cwmgiedd: This is a timely debate, and I shall deal with only one of the questions posed, namely the one about disclosure. I do so because this problem ought to have been solved many years ago. It is the continuing failure to solve it that I shall concentrate on.
Essentially, the one point I wish to make is that the law in relation to disclosure is clear, simple and fair: fair to the defendant and to the complainant or victim. What has gone wrong, however, is the successive failure, over many years, in implementing the law and having proper procedures on the part of the CPS and, more particularly, the police, to ensure that the law is complied with.
I will elaborate a little on this. The law was set out in the 1996 Act and is clear, with its codes of practice and the Criminal Procedure Rules that have been made alongside it. There were, however, issues, and in 2011 the noble and learned Lord, Lord Judge, the then Lord Chief Justice, appointed Lord Justice Gross to look into the entire system. He looked at what happened in the United States and in continental countries to see if we could learn anything. He came back with a very clear recommendation that no legislative change was needed but that a great improvement was needed in how it was handled in this country. In particular, he recommended that there should be a proper recognition of the consequences of the electronic and digital age. In 1996, it is fair to say, the proliferation of documents could not have been anticipated. The focus of Lord Justice Gross’s excellent report was the problem that had arisen in serious fraud and similar cases. He was not concerned with the problem that has come to the fore recently.
As a result of Lord Justice Gross’s report, in December 2013 the then Attorney-General, Mr Dominic Grieve, issued a further guidance on disclosure. At the same time I, as the then Lord Chief Justice, issued, with him, an agreed protocol for dealing with unused material. We both emphasised that the proper disclosure of unused material, made through a rigorous and carefully considered application of the law, remains a crucial part of a fair trial and essential to avoiding miscarriages of justice.
We both realised that there was no point in these fine words and fine documents without putting in place a system of training and explaining what should happen. That was undertaken. However, as the noble and learned Lord, Lord Morris of Aberavon, has mentioned, it became apparent in 2015 that what had been hoped for was not being done. Part of the explanation may be a huge rise and change in the use of social  media in sexual cases. In the old days you had very little by way of disclosure; now, you have massive amounts. From my experience of reading through it, what is exchanged on social media came as a great surprise to many of my age. It is, however, critical, because it shows how the relationship is and, in particular, what may have happened.
In the case to which the noble and learned Lord referred, it was clear—as the trial judge found—that there had been gross incompetence on the part of the police officer. As we caused inquiries to be made of the chief crown prosecutor and the chief constable, it was clear that the fault was systemic. At the end of the judgment we said, in the court, after referring to another 2015 case, that we hoped that that case, and this one, would receive the closest study by the chief crown prosecutors and the chief constables, as there should be no recurrence of failures of this kind by either the CPS or any police force. That was more than two and a half years ago.
We considered asking the Criminal Procedure Rule Committee to see if some kind of supervision could be imposed by the courts, in imposing sanctions for a failure to comply with the law. It was thought, however, and resolved by the Criminal Procedure Rule Committee that this would be impractical and have collateral consequences.
Two noble Lords who spoke earlier referred to the report of the Crown Prosecution Service Inspectorate and HM Inspectorate of Constabulary. It is an excellent report, conducted by two people of great experience. Their conclusion is so important that it is worth reading in full—it is a short paragraph:
“Non-compliance with the disclosure process is not new and has been common knowledge amongst those engaged within the criminal justice system for many years and it is difficult to justify why progress has not previously been made in volume crime cases. Until the police and CPS take their responsibilities in dealing with disclosure in volume cases more seriously, no improvement will result in the likelihood of a fair trial can be jeopardised”.
The report set out a number of recommendations. It was six months to the day that the report was published, and various things should have been done within six months.
I therefore very much hope that the Minister will obtain from each chief constable and each chief crown prosecutor what has been done. We can no longer continue this failure of accountability. There is a very broad issue to which the noble Lord, Lord Beith, referred about the accountability of the relationship. Time does not permit that but what we must surely do is to have concrete action on the accountability of chief constables, who really are not accountable for this matter, and much closer scrutiny of what is happening in the CPS. I very much hope that the Minister will undertake this task and put before the House the responses of the chief constables as to what they have done. It is a disgrace—I do not use that word lightly—that this problem has been left unresolved for so long.

Baroness Brinton: My Lords, I congratulate the noble and learned Lord, Lord Morris, on securing this important debate. In December 2016, your Lordships’ House voted to strengthen the current victims’ code in a number of ways, including giving a duty to all the  agencies involved in any case to follow the code. The duty is presently much weaker than that. At considerations of Commons amendments in January last year the then Minister, the noble Baroness, Lady Williams of Trafford, said from the Dispatch Box that the Government would publish their strategy to strengthen the victims’ code within the year. We know that it has been delayed and we will continue to hold the current Minister and others to account for a consultation by Easter, and for a strategy to be published this calendar year. The fact that it is one year overdue has already affected the lives of a number of victims adversely; we know that there are flaws in the system.
In the short time available in this debate, I will focus on the experience of the most vulnerable victims. This week the Victims’ Commissioner, the noble Baroness, Lady Newlove, who I see is in her place, published her excellent review into the provision of registered intermediaries for children and vulnerable victims and witnesses. The review makes chilling reading. These RIs are trained to work with children and those with specific conditions who need extra support to be able to give evidence in court. In example after example, police officers and CPS advisers—as well as the RIs themselves—talk about how the CPS and the court process, and especially funding problems, are denying these victims and witnesses their rights under our judicial system.
For example, the review says:
“One police officer described how she carried out an interview with a male victim of assault with severe learning disability. She said, ‘every time he spoke he just giggled and could not communicate with her. He responded really well to the male RI, who was able to simplify the questions sufficiently for him to understand and answer them. It made a big difference. The RI struggled a bit but eventually got a full account of what happened. It meant that the man could have access to justice!’”.
In 2016, an HMIC inspection into child protection at the Metropolitan Police Service reported that senior officers,
“recognised the limited availability of RIs and the negative effect this has on the quality of the service provided to children and young people and have raised with relevant partner organisations such as the Ministry of Justice”.
It was also reported that the delays and slow processes in being able to hire an RI were hindering children and vulnerable people in getting access to the help they needed.
To quote again from the report:
“One CPS advocate described her involvement in a case in which the victim was a 15-year-old girl who was assaulted on her way home. The girl had severe brain damage as a child. A statement was taken and the police officer felt that the victim was able to do the ABE”—
the evidence—
“on her own ... The police and the CPS could not agree and the funding for an RI was refused in this case”.
However, there are some good examples, too. The Norwich constabulary uses the achieving best evidence language screening toolkit, known as ABELS, to screen for the communication needs of victims. Other constabularies receive information from schools or social workers for children aged under 10. The problem is that practice is inconsistent—particularly so for vulnerable adult victims and witnesses. What is the  Ministry of Justice doing to ensure that best practice is disseminated to all constabularies—and, if ABELS is the gold standard, will it ensure that this gold practice is rolled out?
Police officers report that the form filling and box ticking to request an RI is overly bureaucratic and time-consuming. Once completed, it takes an average of four weeks for an RI to be allocated. This is a long time in the memory of a small child—or of some adults with learning difficulties—and police officers talked in the report about the conundrum that they face. One said: “I thought, ‘I’m just not waiting—I can’t’. That case involved a three year-old child. Because the child was three, I knew the memory retention wouldn’t be great”. The parents of the child had warned that her memory would not be great and said, “You need to get this done sooner rather than later because of that”. The National Crime Agency said, “You can’t have one for another four to five weeks”. The officer said, “That’s too late” and explained: “In a case like that I have to make a decision—do I sit and wait that long, and risk losing the information, or do I try and obtain it another way?”. What does the Minister propose should be done to simplify the allocation of RIs so that evidence can be taken from these vulnerable witnesses speedily?
Time does not permit me to go through the recommendations of this excellent review, which seems to echo many of the other problems cited with the early stages of the criminal justice system as experienced by victims. But the review is clear on the need for a much better overview and management of processes. I suspect that if that happened there would also be fewer delays and cost overruns and, even more important, less need to re-run trials because evidence has not been produced early enough or effectively enough. For children, young people and vulnerable victims this is particularly true.
We know from previous reports that a large percentage of victims are deeply unhappy with the way that the criminal justice systems treats them. For this group of vulnerable victims, the state has an extra duty to ensure that support is offered as quickly and effectively as possible, both to ensure a smoother journey for the case through the criminal justice system and to ensure that their voice is heard, with appropriate support and justice given.

Lord Brown of Eaton-under-Heywood: My Lords, this brief and highly topical debate, for which we are greatly indebted to the noble and learned Lord, Lord Morris of Aberavon, who over many years has been a tireless contributor in this field, is focused rather on the earlier stages of the criminal justice system than on imprisonment and release. But those matters have been dealt with by those altogether more expert than me, not least the noble and learned Lord, Lord Thomas of Cwmgiedd, and I will turn instead to related questions that I have raised with the House on earlier occasions, notably on prison overcrowding. In much of what he said the noble and learned Lord, Lord Morris, shot and wounded, if not killed, many of my foxes, but I, too, will raise the issue of IPP prisoners, of whom alas Mr Worboys is one.
We had a two and a half hour debate on prison overcrowding in September last. I know that the recent Lord Chancellor read it, because some of us went to discuss prison reform with him. Now we have, sworn in this very morning, yet another Lord Chancellor—the fifth in as many years, such is the value now placed on that once great office. I express the hope that he and his new Prisons Minister, Rory Stewart, will now in turn read that debate and pay heed to it.
As it happens, the first leader in today’s Times squarely addresses the prison crisis. It talks of a “crumbling prison system” and the “dire” situation with fewer staff, an ever-increasing number of assaults on prison officers and fellow prisoners, and prisoners locked up for very long periods. It talks of “squalid” conditions, et cetera. Today’s Motion refers to justice for alleged victims. Justice they must certainly have, but I cannot accept that victims require us to pursue the course that we have taken over recent years of ever-longer sentences, to a point where in fact we now have more indeterminate sentences here than in all the other 46 countries of the Council of Europe combined. Overall, of course, we have a far higher proportion of our population in prison than in any comparable civilised country—I put aside, as an unhappy comparison, the United States. As today’s Times advocates, sentencing guidelines should be revisited.
Let me turn briefly to IPPs and alas, most topically, the Worboys case and the lessons to be learned from it. First, as the noble and learned Lord, Lord Morris, said, the prosecuting authorities, the police and the CPS should always strive to charge the accused with a sufficient number of offences to represent the full extent of his criminality and to indicate fully the degree of his dangerousness. It seems highly questionable whether that occurred in this particular case. Although a 16-year determinate sentence is very considerable—a sentence represented here by the eight-year tariff Warboys got—it might be the case that he actually should have had a life sentence. That would have been appropriate and would have kept him in prison altogether longer.
The second lesson, which Nick Hardwick—who truly is a most excellent chairman of the Parole Board—has himself been advocating, is that there should now be a radical review of the rule that the Parole Board cannot give its reasons or disclose the details of individual cases. It is perhaps worth putting on record here the most relevant provisions of the 2016 Parole Board rules. Paragraph 22(3) says that,
“a hearing must be held in private”.
Paragraph 24(1) says:
“The decision of the oral panel must be recorded in writing with reasons, and that record must be provided to the parties not more than 14 days after the end of the hearing”.
However, paragraph 25, under the heading, “Disclosure of Information”, says:
“(1) Information about proceedings under these Rules and the names of persons concerned in the proceedings must not be made public”.
(2) A contravention of paragraph (1) is actionable as breach of statutory duty by any person who suffers loss or damage as a result”.
As it happens, there were three letters on this in Tuesday’s Times this week. The noble and learned Lord, Lord Falconer of Thoroton, suggested that those rules were “almost certainly unlawful” and that  the courts could and should strike them down. Sir David Latham, referred to already as the Parole Board chairman between 2009 and 2012, in what I suggest was a rather more balanced letter, said that it was time to look again at these rules. In the third letter, a member of the Bar persuasively suggested that there were good reasons for a privacy rule: hearsay evidence is admissible and psychiatrists, probation officers and others might well give information in the expectation of confidentiality. He said that we should certainly beware of hasty rule changes—and I agree.
The third Warboys lesson is that the Ministry of Justice must improve its system for alerting victims—including those who complained but were not themselves the complainants in the charges actually brought—of the impending release of a prisoner.
I end by urging that the Warboys case and the particular problems that it has raised really ought not to be used as an excuse by the Ministry of Justice for losing interest in the genuine grievances of many of the remaining IPP prisoners: those whose tariff sentences were often no more than months or a year or two but who remain incarcerated eight to 10 years after they have served their due punishment. Their plight has rightly been described by ex-Lord Chancellors as a stain on our criminal justice system, and so it remains. They are the subject of preventive detention, which is a form of internment—and that is not our system.

Lord Thomas of Gresford: It is a pleasure to follow the noble and learned Lord, Lord Brown of Eaton-under-Heywood, because I agree with every word he said, particularly on indeterminate sentences. I turn, however, to the issue of rape. A startling statistic from the organisation Rape Crisis is that three-quarters of all adults who contacted their centres in 2016-17—and there were upwards of 65,000 of them— complained of sexual violence that had occurred at least 12 months earlier. Out of every 100 who experience sexual violence, only 15% choose to report it.
What follows? The Ministry of Justice’s statistics, An Overview of Sexual Offending in England and Wales, published in 2013, estimated that there were between 60,000 and 95,000 rapes annually of men and women in this country. As a result of the low reporting rate, however, only 15,000 were recorded by the police as crimes. Of these, only 3,850 were marked as detected. There were only 1,070 convictions. Do people who commit rape steal away into the darkness, never to be identified? No, not at all: 90% of those who complain of rape know who the perpetrator is. For the legal system to deliver justice to victims, the first step is for the victim to make a timely complaint.
If a person is attacked by a stranger—the one in 10 case—there is usually no difficulty in the victim complaining. The police swing into action: they identify suspects through descriptions of the attacker, forensic examination of the attacked person, and careful examination of the scene. DNA is of critical importance and frequently CCTV plays a part. A delay in a complaint of this type will obviously greatly hinder an investigation, and where a stranger is involved, the chances of a conviction are seriously diminished.
However, that is not the typical case. Far more common are acquaintance rapes, where the complainant is able to identify the suspect as someone known to them: a neighbour, a friend, or someone known through dating. Then there are domestic or relationship rapes committed by people who are, or have been, intimate partners or family members. In these cases, there are very often serious disincentives to lodging a complaint, such as the intimate nature of the offence, feelings of shame or fear that the complainant will not be believed or might be blamed for the offence. There may be a lack of confidence in the criminal justice system, or fears for personal safety or the safety of children. It is, of course, entirely understandable in human terms that one or more of these reasons may cause a complaint to be withheld, but it obviously makes the investigator’s task much more difficult.
One Ministry of Justice statistic is telling. Its researches revealed that 57% of female complainants between the ages of 16 and 59 told someone but did not tell the police; 28% told no one and only 15% told the police. No one told the police but nobody else. Your Lordships will appreciate, therefore, that the evidence of a recent complaint to a relative or friend, admissible under Section 120 of the Criminal Justice Act 2003, may be of real significance.
Another issue raised by the noble and learned Lord, Lord Morris, was disclosure, which is a tricky problem. In the recent case of Allan, a huge number of emails and messages had been collected by the police from the complainant. Reports do not say precisely why or how. Clearly, if there was something in them, as there was, which would assist the defendant, it had to be disclosed. I wholly commend the barrister, Jerry Hayes, a member of my chambers, for his action as the prosecutor in informing the defence and ultimately discontinuing the prosecution. It was in the highest traditions of the Bar. I also commend the CPS and the investigators who must have drawn his attention to this material.
It must be realised, however, that it cannot be right routinely to require a complainant to disclose each and every email and message that might be on their mobile phones. A requirement to turn all intimate files over to the police must be a disincentive to making a complaint in the first place. Disclosure must be proportionate. My noble friend Lord Beith asked how it was to be managed. The Allan case illustrates the need for a further protocol that, as the noble and learned Lord, Lord Thomas of Cwmgiedd, said, would be fair both to the complainant and to the defendant.
What I have in mind is that where a defendant clearly raises the issue of consent in interview at an early stage, he should be entitled to make an application first to the police and, if refused, to a magistrate, for the preservation of any electronic messaging within a specific period in the possession or control of the complainant whom he alleges consented to what happened. He should then be required to provide to the investigator such key words as he thinks appropriate for a search of the material. Clearly, his name would be foremost, but so would places, events and dates. The investigator would search the material according to those key words and anything relevant would be  disclosed in the usual way. Of course, the defendant would be taking the risk of there being adverse messages, which would be admissible against him, but if he believed there was material that would assist him, it would be revealed.
The complainant need not fear disclosure of her whole sexual history. A report published last month by the Ministry of Justice and the Attorney-General found that applications under Section 41 of the Youth Justice and Criminal Evidence Act 1999 were made in only 13% of the 306 rape cases examined, and 92% of those applications were disallowed, so the bar against disclosure of the previous sexual history of the complainant is very high. I hope the Director of Public Prosecutions, Alison Saunders, who is meeting today with interested bodies, will consider a protocol along the lines I am suggesting.
I add my thanks to the noble and learned Lord, Lord Morris of Aberavon, for raising an extremely important and relevant issue.

Lord Beecham: My Lords, I congratulate my noble and learned friend on securing this important and timely debate. Much is heard, and rightly so, of the needs of victims in our criminal justice system, exemplified dramatically in the past few weeks by the Worboys case. The distress occasioned by the apparent failure to prosecute more cases involving this offender and, arguably, the even more worrying failure to notify victims of the offender’s release from prison is palpable.
As the Motion makes clear, there are also significant issues affecting defendants, especially in relation to disclosure of evidence material to a prosecution, which need to be addressed, and there are also concerns about the process of decision-making on whether to prosecute. These issues, although they have come dramatically to the fore in the past few weeks, are not new.
Victim Support published a report last April which recounted failures to comply with the victims’ code. Of 19 requirements laid out in the code, three were not met in more than 50% of cases, including offering a chance to make a victim personal statement and having the consequences of such a process explained, while in no less than 62% of cases victims were not asked about their needs and assessed for an enhanced service. In only four categories did the failure in meeting entitlements fall below 20%, and many were in the range of 30% to 50%. Unsurprisingly victims were much more satisfied when they received all the code’s entitlements than otherwise. There is a clear systemic failure to meet the needs of victims in a range of material issues. The report concluded that more monitoring and enforcement of the victims’ code is required. Can the Minister confirm that these matters will be addressed in the new strategy for victims expected to be published soon?
Disclosure of unused material is another area of concern, as we have heard, which is reflected in the joint report by the Crown Prosecution Service Inspectorate and the Inspectorate of Constabulary last June. As the report pointed out, every item of unused evidence should be retained and reviewed to see whether it  could undermine the prosecution or assist the defence and, if so, it should be disclosed. In practice, however, the process was described as,
“routinely poor, while revelation … to the prosecutor of material that may undermine the prosecution case or assist the defence case is rare”.
Sensitive material is not managed effectively, and prosecutors are not managing ongoing disclosure, with an audit process,
“far below any acceptable standard”.
The report concludes that the failure to provide timely disclosure leads to,
“chaotic scenes … outside the courtroom … unnecessary adjournments and … discontinued cases”,
which,
“reflect badly on the criminal justice system in the eyes of victims and witnesses”.
The report made nine recommendations, one for immediate action, six for implementation within six months, and one for implementation within 12 months. Will the Minister update us on progress in the past nine months?
While we are considering the question of resources, it is interesting to note that the Sunday Telegraph—not my usual paper of choice—reported on Christmas Eve that prosecutors were being urged two years ago to boost rape cases but that the CPS,
“found lawyers struggling with deadlines, pressing charges where there was scant chance of conviction”,
and that the service was underresourced, making it difficult to achieve quality casework. The telling headline to the Telegraph article was:
“We warned sex trials would suffer under workload, says CPS”.
The report was published last February. Will the Minister tell us what extra resources have been allocated to meet that difficult situation?
My noble friend Lady Chakrabarti last month referred to two recent cases in which inadequate disclosure of material led to acquittals, after much stress on the innocent defendants, and attributed this to the underfunding of an overstretched CPS and police service, although—one might have thought predictably—one Nick Timothy, the Conservative Party’s answer to Steve Bannon, denied that resourcing was an issue. In fairness, he at least welcomed the acquittal of the unfortunate Liam Allan after two years of police bail on a charge which ultimately fell apart. The Prime Minister’s statement that it is,
“important that we look at the issue again to ensure that we are truly providing justice”,—[Official Report, Commons, 20/12/17; col. 1062.]
was very welcome, but it needs to be followed through by an independent review of process and a commitment to ensure that adequate funding is available to train, employ and supervise the relevant staff in the police service and the prosecution service.
My noble and learned friend Lord Morris asked a Private Notice Question on the disclosure issue in December. The noble Lord, Lord Faulks, took the opportunity to ask whether there were,
“adequate resources, by way of legal aid or otherwise”,—[Official Report, 18/12/17; col. 1836.]
to enable defence lawyers to analyse all the pieces of relevant information, to which the Minister replied that that point would be addressed. It was surprising that no assurance on this critical point was proffered at the time. A month on, what is the position? This is surely an issue which could be addressed immediately.
One area on which the Government have appeared to take action is pre-trial cross-examination of victims, with the Attorney-General saying in November that he welcomed the further rollout of this practice. Will the Minister say what progress has been made in this area and what targets have been established for its adoption? It is to be hoped that change of this and other kinds will not be delayed because of resource implications, not least because it could actually save money if properly employed, as well as improving the substantive process and helping victims cope with the stress of reliving their experience.
This has been an interesting and well-informed debate. I hope that the Minister will be able to give some assurance that progress will be made sooner rather than later in tackling the variety of problems raised not only by your Lordships this afternoon but by other organisations to which I and other noble Lords have referred.

Lord Keen of Elie: My Lords, I join other noble Lords in congratulating the noble and learned Lord, Lord Morris, on securing this debate.
Justice is at the heart of any democratic society, and providing protection to the public from wrongdoers, while also ensuring that everyone has a right to a fair trial, is at the centre of the rule of law. Fairness means fairness to all—equality of arms—and so, just as the prosecution should have ample opportunity to present its case before an impartial court, so too should the accused have access to relevant evidence and material that might assist them challenge or rebut the prosecution case. The court should provide an environment that encourages complainants and witnesses, sometimes vulnerable or in distressing circumstances, to give their best evidence to aid the court in determining what happened and to reach its verdict fairly. This is clearly an important debate and one of heightened public interest at present in the light of some of the cases that have come to the fore in the media.
Under the Code of Practice for Victims of Crime, complainants are entitled to a range of services throughout the criminal justice process before, during and after the prosecution of the accused. I shall not enumerate them. The noble Lord, Lord Beecham, alluded to them and to the need for us to ensure that the code is properly applied, and I note his observations in that regard. Complainants are also entitled to be informed on whether the suspect is to be prosecuted and, if dissatisfied with a decision not to prosecute, to seek a review of the police or prosecutor’s decision not to prosecute.
Coming to disclosure, let us be absolutely clear that we are at one on this. Compliance with disclosure requirements is vital if there is to be a fair trial, which is in the interests of the complainant, the accused and  indeed the whole community. All evidence upon which the prosecution intends to rely must be disclosed to the defendant. Furthermore, the prosecution must disclose any relevant undisclosed material which it is not using as evidence but undermines their case or strengthens the defence case.
Prior to recent events, the Attorney-General had launched a wide review of disclosure procedures in the criminal justice system. His review will consider how processes and policies are implemented by prosecution and defence practitioners, police officers and investigators. This was commissioned following the comprehensive joint inspection of disclosure by Her Majesty’s inspectorates referred to earlier, which concluded earlier in 2017. The scope of the review is wide, covering cases in the magistrates’ courts as well as more complex Crown Court cases and specialist types of cases, including economic crime and sexual offences. The review will examine existing codes of practice, protocols, guidelines and legislation as well as case management initiatives and capabilities across the criminal justice system, including how digital technology is used.
The noble and learned Lord, Lord Morris, alluded to the massive increase in material that has now become available—for example, in the context of sexual cases where social media may play such a significant part. Of course, social media does not just reflect messaging between a complainant and a defendant; there may be social media involved in communication with third parties. There is a massive amount of material there that is potentially relevant to any complaint.
Over and above that, I make one short observation: very often, the defendant will know or not know whether there should exist social media of that kind. We had a recent example of a case where someone complained that photographs on his phone were only produced at a very late hour. What I find somewhat surprising about that case is that the defendant must have known all along whether he had taken such photographs on his phone and whether or not they were there. If there had been timely disclosure of that, it might well have been possible to recover them much earlier than was done.
We know that we have to address the new digital age in this context. Technological developments and the way investigations are conducted are leading to new and emerging issues. The Attorney-General’s review will look at this as well as building on the recent reports on disclosure which have been referred to and identify a number of issues that have arisen with regard to knowledge, skills and training.
The noble Baroness, Lady Brinton, referred to victims’ support. We are increasing expenditure on that. The noble Lord, Lord Beecham, referred to Section 28 provisions on pre-recorded cross-examination special measures in that context. We are addressing this: we want to reduce the stress of court and make sure that vulnerable and intimidated witnesses can give their best evidence. We are rolling out a pre-recorded cross-examination system for vulnerable witnesses in Crown Court centres in England and Wales. This will also be tested in the context of not only vulnerable witnesses but witnesses who are complainants who may be the subject of intimidation, for example.
Helping witnesses and victims give their best evidence is of course a core part of the Crown Prosecution Service’s role, and the CPS aims to do everything it can to help them with the difficult and sometimes traumatic experience of appearing in court. Prosecutors can apply for special measures to allow vulnerable, intimidated or child victims and witnesses to give evidence in court unseen by the defendant. This can be achieved also by using videolinks. Vulnerable people—complainants and witnesses—can receive assistance in giving their evidence through an intermediary in appropriate circumstances.
The noble Baroness, Lady Brinton, touched upon the question of the victims strategy and the extent to which there was room for RIs—registered intermediaries—to be available. We are pursuing that. In 2015-16, we recruited 100 new RIs, doubling the size of the scheme. We are currently running a regional recruitment drive, which we hope will increase the numbers further by about 15% nationally. We appreciate the need to ensure that this is rolled out nationally and is not simply to be found in a few regional hot spots, if I can put it that way.
Mention was made of recent cases of failure of disclosure, in particular the Liam Allan case. The Crown Prosecution Service and Metropolitan Police are jointly conducting an urgent review into the Liam Allan case, which collapsed at trial. Clearly, it is crucial that the circumstances of the case are examined, any wider issues identified and appropriate lessons learned. The findings of that review will be published before the end of this month. It would not be appropriate for me to pre-empt that review and speculate further at this stage. The CPS and the Metropolitan Police are also looking at all live rape and serious sexual offence cases to check that disclosure is being handled appropriately.
The Crown Prosecution Service is committed to working effectively with the police in the context of issues such as disclosure, and indeed doing so from an early stage of any investigation in order to build the strongest possible prosecution case for trial where the case meets the test for charge and to bring to an early conclusion those cases which do not. It is necessary in this context to be fair to the complainant and to the defendant in these circumstances.
The Director of Public Prosecutions has a good relationship with the chair of the National Police Chiefs’ Council, the Metropolitan Police Commissioner and the lead officers for criminal justice on this and other topics. There is regular communication with chief constables in that context.
I note the point made by the noble Lord, Lord Beith, with regard to other systems of prosecution, in particular the position under the Crown Office and Procurator Fiscal Service in Scotland, where of course a distinct jurisdiction is exercised because there the Crown and the procurator fiscal are in a position to direct the police on the conduct of any investigation. I would not like to suggest that one system is better than another at this stage. Clearly, the DPP’s guidance on charging sets out arrangements in England and Wales for the joint working of police officers and prosecutors during the investigation and prosecution of criminal  cases. Prosecutors may provide early investigative advice in serious, sensitive or complex cases, and in any case where a police supervisor considers it would be of assistance in helping to determine the evidence, the supervisor will be able to seek advice in that context. I accept that the system in other jurisdictions is different.
The CPS and the police have agreed a joint approach across England and Wales to monitoring and improving the quality of files submitted by the police to the CPS. There may be instances where a police file is submitted to the CPS and then returned in order that further investigation or further inquiry can be made in a particular case.
I touched upon the matter of the progress of the victims strategy that the noble Baroness, Lady Brinton, asked about. The Government have made a commitment to publish a victims strategy in 2018. The new Secretary of State for Justice, sworn in as Lord Chancellor this morning, has not yet had the chance to look at the work done so far in detail, but he clearly regards this as an important part of his agenda, underlined by recent events.
Reference was made to the case of Worboys. The Government believe that there is a strong argument for reviewing the case for transparency and the process for parole decisions and how victims are appropriately engaged in that process. As I mentioned on a previous occasion, there is a distinction between those who are the victims of complaints that have been the subject of successful prosecution and those who have been the victims of complaints that were not proceeded with. In the latter case, the matter of intimation is discretionary rather than obligatory. The Secretary of State made a Statement to the other place on this matter on 9 January. He has spoken to the chair of the Parole Board and the Victims’ Commissioner about what changes might be made in the present circumstances, and the Ministry of Justice will lead the review with the view that decisions can be taken on this by Easter.
Very briefly—as I am living on borrowed time at this point—I shall respond to some points. The noble and learned Lord, Lord Morris, asked me two questions. First, the Attorney-General last discussed non-disclosure with the DPP on Monday 15 January; it is a current issue. The Attorney-General’s review of disclosure was triggered in part as a result of the joint inspectorate report that has been referred to. Progress by the CPS against the recommendations in that report is the subject of regular discussion at the superintendents’ meetings.
I am not going to go into the details of the Worboys case and what was and was not prosecuted. The noble and learned Lord, Lord Brown of Eaton-under-Heywood, suggested that perhaps not all appropriate cases had been prosecuted. It would not be appropriate to speculate on that; the CPS has an evidential test to apply, and I would not seek to second-guess the process in that context. However, I would say that Worboys was a case of an IPP sentence but I see no reason why that particular incident should impact directly upon our consideration of how we are going to proceed in the context of IPP sentences in future. That is a matter that has been the subject of ongoing debate and discussion and will no doubt continue to be.
I hope that I have reassured noble Lords that we are concerned about the issues raised here relating to victims, disclosure and the need to keep vulnerable victims and complainants fully informed of the outcome of a prosecution and, indeed, the outcome of any sentence, including issues of parole. I will not go into the details of particular cases that have been mentioned, but I will underline a point made by the noble Lord, Lord Thomas of Gresford: disclosure is central to our system of criminal justice, but it must be proportionate. When we come to deal with these issues, we must respect the rights and interests of the complainant and of the defendant. They are challenging issues; we are addressing them; and we shall address them further in the light of recent events.
I am obliged to noble Lords, and I thank the noble and learned Lord, Lord Morris, again for this debate.

Green Finance
 - Motion to Take Note

Moved by Lord Teverson
That this House takes note of the case for the United Kingdom to remain a global leader for green finance, and for the United Kingdom’s financial sector to be resilient to climate change.

Lord Teverson: My Lords, I declare my interest as a trustee of the Green Purposes Company, which is the green shareholder for the Green Investment Bank. Regrettably, it is an unremunerated position.
An interesting thing that happened when the appointment of myself and my four fellow trustees of the Green Purposes Company was announced was that the five of us were described in one publication as “reliable eco-warriors”. This took us rather by surprise because we had never really thought of ourselves in that sort of role. Certainly, and probably unfortunately, I have never been on a Greenpeace ship in the Southern Ocean protecting the orange roughy from being exterminated.
What the five of us also had in common, apart from that description, was that we had all been involved in various ways in the finance sector. It struck me then how many in the outside world see a contrast, if not a contradiction, between high finance, or finance generally, and those who are concerned about and campaign for the environment; they are seen very much as separate bedfellows. If I want to do one thing in this debate, it is to show that it is vital that those two characteristics—those skills, those markets, those interests—are indeed bedfellows in the way that the future of our planet develops.
The background to this debate is, inevitably, the Paris agreement of December 2016. Its headline purposes were to reaffirm an international agreement on the target for a maximum planetary temperature change of 2 degrees, but the island nations of this world in particular aspired to an increase of only 1.5 degrees. When I secured this debate, I wondered what the financial size was of the commitment to meet the Paris agreement. The numbers are very difficult to envisage but I shall give the House two of them. The first is $100 billion a year is needed by 2020 to support  climate action just in the developing countries—that does not even include the developed world. Secondly, the International Energy Agency estimates that $26 trillion of additional investment is needed in renewables and energy efficiency between 2015 and 2040 to achieve even the two-degree target, and that is just in clean energy efficiency and generation. However, it is not just about those areas. We also have a need for energy storage, recycling and circular economy systems, right the way down to the minutiae of smart meters, home insulation and research and development into new technology. It is blindingly obvious that public sector money has no chance of getting anywhere near those totals, so private sector investment is vital.
That is merely around the mitigation of climate change. In terms of adaptation, major weather events demand major upgrading and the provision of public and private infrastructure, the most obvious element being coastal defence. The key role here is that of the insurance industry in covering the costs of flooding, storm damage, firestorms and droughts. The numbers show that insured losses have increased from an average of around $10 billion per annum in the 1980s to an average of around $45 billion per annum—a fourfold increase so far this decade. Overall losses are up threefold over the past 30 years: there are some four times the amount of insured losses.
Taking those mitigation and adaptation imperatives to meet the climate change challenge, and then connecting with the world of finance, we meet head-on the challenge of financial stability and resilience. Two threats are seen here. One is transition risks, which are about the reallocation of assets from dirty to clean technologies. The challenge is to do that in an orderly market transition. The remedies are classic: green investment finance; transparent corporate reporting around assets, not least the potential stranded assets; and corporate environmental performance. Then there is the adaptation side—the physical risks of climate events, which are very much down to the insurance and banking sectors.
Why is this important to us? As we know, the UK, particularly London, is a global financial centre. Let me give some of the numbers again, although many people here for the debate will know them. The City and the financial sector generally in the UK offer, and provide, £125 billion of gross value added. That is some 7% of total UK GVA. Its trade surplus is something like £26 billion, it employs 1 million people—some 3% of all jobs—and gives a tax take of more than £70 billion, which is some 11% of Treasury receipts. Only 50% of that GVA is in London. Another 10% is in the south-east and 7% in Scotland, which is another important centre.
Why is green finance an opportunity? As well as being an important economic hub, the UK has an important financial ecosystem. First, we have world-class commercial legal practices, English contract law, the London Stock Exchange, AIM and other world-class financial exchanges, top global universities and business schools, and a vibrant fintech sector. We can also provide the full range of financial services, not just the obvious Green Investment Bank-style investment finance and green bonds—although I recognise and congratulate HSBC and Barclays on the issuance of foreign currency  green bonds that we already have in this country. There are also the insurance and reinsurance markets, including catastrophe bonds and resilience bonds, carbon trading, private equity and venture capital, crowdfunding and, right down at the retail end, green collective investment schemes and green mortgages. All have a place in the financing of a clean future.
Secondly, the UK is an environmental hub. We have international NGOs such as WWF, Greenpeace and Friends of the Earth headquartered in London. We have superb environmental consultancies such as E3G, university centres of excellence such as Imperial College’s Grantham Institute and—more down my way in the south-west—we have the internationally renowned Met Office, based in Exeter.
We also have environmental leadership. That came partly out of the Climate Change Act, which we as a Parliament passed 10 years ago. The original Stern report is still highly regarded. We have had, and still have, leadership in the European Union on climate change. Our sherpas were key in delivering the Paris result. We also have the leadership shown by Governor Mark Carney and the Bank of England, co-chairing with China the G20 Green Finance Study Group, and Carney’s leadership within the Financial Stability Board. I congratulate him on the work that he has done, and on what he has brought to international attention in the financial sector.
My point is that this is the perfect match in the making. London is best able to provide us all with a sustainable future, and that sustainable future needs the power and skills of London. When I say London, I mean the broader UK financial community as well. This can be win-win for the City and for our planet. Let us make no mistake: this transition to a clean economy is going to happen. As we have seen across the Atlantic, despite Trump’s efforts to reverse the clock, American states and corporate America continue to move down the path to a clean economy—rather too slowly, but the economics are driving that just as much as the politics are resisting it.
The only questions for us are: are we to remain at the centre of these new opportunities, and how do we consolidate our lead? Scandinavia is already rearing its head in this area, and there will be major investment in Asia in the future. The French have already issued a sovereign green bond worth some €7 billion. We cannot be complacent. We must maintain our position by breaking down barriers, and building on our competitive advantage.
The barriers are generally seen as externalities, such as the total costs not meeting the complete environmental and social costs, maturity mismatch, lack of clarity, asymmetric information and inadequate analytical capabilities. In London we can be really good in most of those areas. But I must say to the Government that we also have barriers in the UK, such as a shrinking home market. This week the Bloomberg New Energy Finance report points out that UK investment in renewables and smart energy technologies fell by more than half—by 56%—in 2017, the biggest fall in any country.
Our access to European Investment Bank money will disappear following Brexit. The EIB has provided loans of more than €37 billion for UK energy  infrastructure since 2000. In the UK we have a lack of pace. The Smart Meters Bill will come to us shortly, yet when I came to the House over 10 years ago that was supposed to be urgent. We also have the uncertainty over Brexit and its effect on our financial sector.
What is the answer to this? There is an important agenda. We need action from the Government to achieve the fourth and fifth carbon budgets to make sure we have a good home market, and we need to keep our environmental and financial communities here in London and in the City coherent despite Brexit. I believe that we need to remain a member of the EU ETS. We need to continue welcoming all talent into the City, including from non-environmental areas. We need to create and validate world-class benchmarks and indices. We need to keep standards in our financial affairs that keep out “greenwash”, which is so easily done and will undermine our reputation, and to stimulate retail investment products so that households and individuals can also participate in this market, as well as product development and research. We need more mandatory reporting for UK-listed companies in line with the recommendations in the excellent report of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures. As a former trustee of a local authority pension fund, I know we need to show that fiduciary duty does not always mean conventional investment in huge pension funds.
I welcome the Government’s green finance task force but we need to seize the moment now. The good news is that this programme requires little public money to implement but does require legislation and some regulation. We need to reinvigorate our environmental leadership and remain outward-looking as much of the investment will be in the developing world. Therefore, I ask the Minister to take very seriously the recommendations of two excellent reports among many: the City of London’s Fifteen Steps to Green Finance and the report of the FSB’s Task Force on Climate-related Financial Disclosures. Will the Government move forward those recommendations—not least, as a starter, the City’s demand for the establishment of a new UK green standards board? Will the Treasury issue a green savings bond, like the French?
The Clean Growth Strategy and the 25-year environmental plan are welcome but do not contain enough action. We need action now. This is a golden green win-win opportunity. In Cornwall we say, “This is the moment to ride the wave”. I challenge the Government not to miss that opportunity. I beg to move.

Lord Barker of Battle: My Lords, I draw noble Lords’ attention to my entry in the register of interests, particularly my commercial interests in the clean energy economy and my membership of the boards of the Environmental Defense Fund Europe and the Climate Group.
I congratulate the noble Lord, Lord Teverson, on securing this important debate and on his excellent speech. That should come as no surprise as I have engaged with him over many years. He is not only very knowledgeable on this issue but has a broad horizon. The points that he made were very apposite.
I am very excited that after what one might politely call a lull, this Government have finally got their green mojo back. It cannot go unnoticed that we now have three important Ministers at the heart of government re-energising and driving the green agenda forward again. I was delighted to see the Climate Change Minister promoted to the Cabinet in the recent reshuffle. She is the author of the clean growth plan and I know from personal experience that she is fizzing with ideas and absolutely determined to turn them into action. I am delighted to see that the Secretary of State for Business, Enterprise and Industrial Strategy remains in his place—I am sure that was always the Prime Minister’s plan—to drive forward that industrial strategy, which has a rich green vein running through it. I know that he is absolutely committed to the decarbonising agenda. Perhaps for many the greatest surprise of this parliamentary year was the vigour with which the new Secretary of State for the Environment has grasped this agenda. Those of us in particular who may not see eye to eye with him on his Brexit views could not fail to be impressed by the reforming zeal which he has brought to that brief. He has turned Defra from an outpost and backwater in Whitehall to probably the most exciting department in government. That is great. I can honestly say that I have not been this excited about the Government’s green agenda since 2006, when I was pulled to the top of a glacier in Norway alongside David Cameron by a group of rather photogenic little huskies, who together helped us push the green agenda to the top of the political agenda back here at home.
Following that politically important trip, I was very proud to play my part in taking the Climate Change Act through the House of Commons for the Conservatives. The great thing about that Act, which had a few critics at the time, was the strong cross-party consensus that underpinned it. It is a tribute to the Labour Government of the time that they brought it forward, but in Committee, the other place and here, Parliament was at its best, and being constructive.
The criticism we faced on the climate change legislation was that we were unduly precipitate in acting the way we were, legislating in quite a dramatic way and responding to a threat that was not yet proved. Some of the assumptions that we put on the face of the Bill, requiring emissions reductions for decades to come, were very bold indeed. We had no way of knowing whether we would be able to achieve them. I am particularly proud that, thanks to that strong cross-party action, we have an Act in which targets are being met. We have met the carbon budgets up to 2017. Although there is more action required to deliver the carbon budgets in the coming decades, I am confident that there is the will in government to close the relatively small gap that will see us through to the 2030s.
I do not want to sound complacent. I do not pretend that this is going to be easy—the easiest things are probably behind us now. We can all marvel at the fall in the cost of clean energy. It is quite extraordinary. When I became a Minister in 2010, the subsidy for the smallest solar installation was 43p per kilowatt hour. To all intents and purposes, there is barely a solar subsidy now. At a commercial level, solar farms are going into operation without any subsidy at all, but the  profitability of solar continues to grow. This is fantastic and confounds all of those sceptics and naysayers. It fully warrants the Government’s intervention and public investment in those early schemes and tariffs.
Here we are in 2017. Not only was the UK the first country to introduce binding domestic climate change targets but, in 2016, as the noble Lord, Lord Teverson, said, we were instrumental in helping secure the Paris Agreement. Since 1990, our national carbon emissions have fallen more and our national income has risen faster than any other nation in the G7. We have proved once and for all that you can reduce pollution while increasing prosperity.
The latest figures from the National Grid indicate that last year was the greenest year ever for the energy sector. Between June and September, almost 52% of electricity generation came from low-carbon sources and we now have the largest installed offshore wind capacity in the world. The cost of offshore capacity is tumbling thanks to that early Government support. We are also continuing to phase out coal; the leadership that the UK Government are taking on that is particularly commendable. However, all of this investment historically and in the future is dependent on raising sufficient scale of finance. As the noble Lord, Lord Teverson, said, the amount that we have to secure is mind-boggling.
My first real engagement with this agenda came in 2010, when I attended my first international climate conference as a Minister. That was in Oslo, just after the May general election. At the time, the international community was doing its best to pick up the pieces after the disappointment of Copenhagen in 2009. One of the few positive things that came out of Copenhagen, thanks to Gordon Brown, was the commitment that the UK secured to mobilise $100billion in climate finance a year, by 2020, from developed to developing economies. However, that was about as far as it went. It was a vague ambition—an aspiration. It was not at all clear where that money was going to come from or where the split between the public and private sector would be, which was open to a broad interpretation.
On the flight home, sitting with my private secretary, I began to scribble a few questions on the back of an easyJet napkin. Which institutions will create these products? Which fund managers will buy these products? Which investment banks will invest in creating these markets, and, in fact, which markets will support these products? There were so many questions. When I came back, therefore, I convened a round-table discussion of a few people from the City. That small discussion became something called the capital markets climate initiative, which in turn, by the time I ended my tenure, had grown to include about 60 or 70 UK institutions from the City. I became incredibly impressed by the way in which City institutions are keen to engage on this agenda, prepared to think beyond tomorrow to years to come, and prepared to innovate to design the type of financial products we need. However, there is still a strong requirement for government leadership—for government to convene, and, when necessary, to intervene in the market. As the noble Lord, Lord Teverson, said, there is still a need for international leadership.
We therefore need to look carefully at the recommendations of the green finance task force that the Government have set up, particularly as it relates to transparency—as the old adage says, “If you don’t measure it, you can’t manage it”. We also require far more of our institutions—in fact, the vast majority of our City institutions—to engage much more strictly with this agenda and to be much more open and transparent in the investments they make.
I was interested in a report that Christian Aid produced and kindly sent to me ahead of this debate, entitled Our Future in Their Plans: Why Private Finance is the Public’s Business, in which it commended Aviva and Legal & General for their response to Paris, their clear targets and their positive engagement. Unfortunately, nearly all the other institutions that were measured fell far short of what we need in the current post-Paris age to deliver those 2020, and indeed 2050, climate targets.
I am an optimist, but we need the Government to continue to lead if we are to maximise the impact that the City of London and British financial institutions can have, not just here in the UK but around the world, in helping stave off the worst impacts of man-made global warming.

Baroness Kramer: My Lords, I suspect that everybody in this Chamber and most people who will read Hansard are incredibly well aware of how countries across the globe—not just the traditional green players but new powerhouses, notably China and India—are now absolutely determined to achieve green economies. Our first two speakers, my noble friend Lord Teverson and the noble Lord, Lord Barker, gave us a sense of the extraordinary size of the investment that is necessary to back up that ambition. We recognise that we ourselves cannot possibly achieve our environmental goals, and those countries certainly cannot achieve theirs, unless we unleash the power of the financial markets to underpin green policies. Mark Carney has warned us that if sustainable strategies fail, our own economic future will be threatened. We therefore have every interest in making sure that that the green finance agenda is a success.
So far, London has played an important role in developing green finance. There are 64 green bonds listed in London, raising over $20 billion in seven currencies. However, we need to be honest: it is not a dominant role. In 2017, London listed 27 new green bonds, raising $10 billion, but across the globe the issuance of green bonds totalled $120 billion. Part of that was purely domestic—not all of it was international—but it makes it clear that the dominance London is often used to in the sectors in which it leads is not yet established in this field. We have expertise in renewable infrastructure funds and in green indexes offered through the FTSE Russell, and we are known for our ability to innovate. But this is a wide open market. Hong Kong, Luxembourg, Paris, increasingly, and New York are all players; the Irish and the Swedes are taking initiatives in this area. I wish to see London confirmed as the leading international financial centre for green finance. Of course, the Government’s green finance task force is looking at these issues, but let me  recommend four actions the Government could adopt sooner rather than later that would be game-changers in confirming London’s role.
First, the Government should issue their own green sovereign bond. This would act as a mechanism to finance the UK’s own portfolio of commitments to green infrastructure. Clearly, the money could be used for energy-efficient home building and indeed for zero-carbon homes—an opportunity for the Government to bring back a programme that frankly, they should never have abandoned. It could underpin pilot programmes in carbon capture and storage. It could be used for the long list of green transport, land management and energy projects the Government have signed up to. Just as significantly, it would be a prestige instrument, attractive to a wide range of investors, educating and pump-priming the market. The noble Lord, Lord Barker, talked about the importance of pump-priming technology. It is just as important to pump-prime new financial instruments, and this is an illustration of that. For those who say that this is slightly off the wall, my goodness, China, France, Nigeria and even Fiji have issued green sovereign bonds. We have a lot of catching up to do to be a major prestige player.
Secondly, for London to lead we need to develop the retail market in green finance—instruments small enough and local enough to attract the ordinary investor. We are seeing some action at the retail level: Triodos, Ecotricity and Belectric are three examples. Abundance is a world-leading platform that allows small investors to put their money into green projects—I was looking at its website this week—from a solar farm to the green use of whisky residues. However, it will require work from the Treasury to make IFAs and other advisers aware that they can recommend such options to clients who desire them, and broader public education is critical. Financial education—financial literacy, if you like—must extend to cover the green investment sector.
Undoubtedly there is potential for tax policy to support both the green bond and retail markets. The US offers tax incentives for bonds financing green buildings and renewable energy. For people who think that the US is well behind the curve, this is an example of where it is ahead of it. Brazil allows tax-free bonds to be issued for wind. China is working on proposed tax incentives for green bonds generally. Mexico and India have tax incentives for green bonds at municipal level. Even Singapore has a grant scheme to cover the costs of green bond verification.
What about a green mortgage scheme? Barclays has issued its first bond secured against mortgages on homes that meet energy specifications: what an effective way to drive both energy-efficient new build and retrofit. There should not be one or two instruments from one bank or another; they should be widely issued. Central and, especially, local government could play a significant role in helping this market by encouraging or even sponsoring similar instruments. The US, never slow to seize an opportunity, is pioneering a range of green securitisations well beyond mortgages, and Fannie Mae—going back to something close to the mortgage market—has completed one of largest ever issues to back energy-efficient housing retrofits.
Other noble Lords have said that this has to be underpinned by investor confidence that the projects financed through green instruments are genuinely green. This is an area where the UK, because its regulators are so highly respected, can lead.
All around the globe, various different entities have sprung up to provide verification for green projects. Some of them are not-for-profit, some are charities. But frankly, it is such a diverse and complex arena of verifiers that we can legitimately ask whether people and investors understand the standards they establish. Who verifies the myriad verifiers? So far, no one is playing that kind of role. That is a serious role for the FCA—verifying the verifiers and assuring standards for any green issuance in the UK. It would enhance the UK’s global status. We all recognise that in contrast, nothing would kill the market faster than a suspicion of falsely green claims.
This is not a time to be complacent. The climate change agenda is urgent and we must support it in any way we can. But if we can do it in ways that also enhance the UK’s global role in finance, that would be a second prize worth winning.

Lord Mountevans: My Lords, I add my thanks to the noble Lord, Lord Teverson, for his insight during this debate, and for providing an opportunity to address this important issue. My City interests are recorded on the register.
I approach this debate not with the intention of giving an environmental sermon, but as a businessman, having had the privilege of launching the Green Finance Initiative at the City of London Corporation back in 2016, alongside Sir Roger Gifford, one of my predecessors as lord mayor and now chairman of the initiative, the so-called GFI. Tackling climate change is one of the defining challenges of our time, but it also represents a material and financial risk to us all. Left untackled, the cost of climate change will permeate throughout the financial services sector—via pension funds, share prices, premiums and loans—not to mention the impact on GDP and the wider economy. We therefore face an economic and prudential as well as an environmental imperative to act now.
At its core, the appeal of green finance is that it invites businesses, savers and investors to contribute to tackling pollution and climate change while safeguarding long-term profitability. In short, it is what I like to think of as business playing its part in addressing climate change. Over the last decade, green finance has risen to the top of political, regulatory and industry agendas worldwide. This was demonstrated at the G20 summit in Hangzhou in 2016, where world leaders made an historic commitment to “scale up” green finance after President Xi adopted it as a key issue for the first time.
It is well known that Paris has long identified the value of green finance, and has been driven in particular by a moral vigour since the 2015 UN Climate Change Conference at which the Paris Agreement was negotiated and adopted. Indeed, as noted, France became the first country to issue a sovereign green bond in 2017, underlining its desire to be seen as a driving force for the implementation of the goals of the agreement.
However, London’s appeal lies in the fact that it can offer more than worthy intentions; the UK can provide commercial expertise and a global business hub with which to grow this new and innovative product. One of the City’s great strengths is its ability to capture fresh trends and evolve, as demonstrated by the growth of Islamic finance in London in recent years, for example.
Since 2008, the UK has led international efforts in green finance, launching the first offshore green rupee and renminbi bonds in 2015 and 2016 respectively. I had thought that there were now 59 bonds but I was delighted to hear from the noble Baroness, Lady Kramer, that there may be 64 bonds listed in London in seven different currencies—a sign of how rapidly the global appetite for green products is growing and of how quickly the market is expanding.
However, your Lordships will recognise that green finance still occupies a niche position in relation to the UK’s wider financial services offering. I look forward to seeing the results of Sir Roger’s labours at the GFI, and the results from the Government’s newly launched green finance task force, which will publish its recommendations in the spring to accelerate the growth of green finance in the UK.
May I take a moment to be so bold as to make just two suggestions that I hope the Minister will take the time to reflect on? First, I would join with the previously made request for the Government to consider implementing the recommendations from the Financial Stability Board’s Taskforce on Climate-related Financial Disclosures, particularly in relation to greater corporate disclosure. Indeed, through its work with the green finance task force, the GFI can act as a hub for exchanges between public and private sector to explore policy proposals for implementation, including existing UK codes, regulation and laws.
Secondly, I urge the Minister to forget all that he learned in history lessons and consider following French footsteps. I refer to the flotation by France of a sovereign green bond previously mentioned. It would certainly be a significant, symbolic and practical step for the UK to issue its own sovereign green bond and I know that the financial services industry would welcome this most warmly. Interestingly, Paris has issued a green bond—an idea not yet contemplated by London. But it is encouraging nevertheless to note that Transport for London in fact issued its own first green bond back in 2015. This may be a good moment to note that, in my understanding, there is no premium for green finance, so it is competitive.
Also central to the sector’s success here is the Government’s ability to promote the UK as a key destination for green inward investment, and the development of financial relations and solutions abroad through our green financial expertise. Given the considerable time spent in this place discussing our existing trade relations, green finance presents an opportunity to consider new relationships with trading partners around the world and a chance to exert Britain’s soft power.
The Green Finance Initiative has established formal partnerships with its Chinese counterpart, the Green Finance Committee. As confirmed by the recent Economic and Financial Dialogue, it is an extensive partnership  focusing on the global development of green finance. Importantly, in 2018, the GFI expects to conduct detailed work in a number of areas including green standards for strategic investment in belt and road infrastructure. Your Lordships might also be interested to know that, in 2017, the GFI also signed a formal partnership with its Brazilian counterpart, the Council for Sustainable Market Development, focusing on public sector leadership, standards and certification, and data.
Ultimately, the success of green finance lies in collaboration. International leadership and partnerships will be key to driving capital flows through London after the UK leaves the EU. It is essential that London, as a financial centre, remains flexible in adapting to the needs of investors and customers in order to continue as a global leader in green finance. To this end, the City of London has already focused attention via government, business, banks and institutional investors on ways in which to grow the sector, while promoting best practice. Combined with the Government’s commitment to a new industrial strategy, which your Lordships debated in this place only last week, and the Clean Growth Strategy, the UK is in a strong position to capitalise on progress already made.

Bishop of Durham: My Lords, I add my thanks to the noble Lord, Lord Teverson, for securing this debate. This year’s COP 24 UN climate change conference will be a crucial opportunity for the world to accelerate its climate ambitions in order to try to meet the 1.5 degree Paris commitment. This country faces a choice: do we want to lead the charge on this or drag our heels somewhere near the back? I welcome the UK Government’s recent focus on environmental issues. Initiatives such as the green finance task force, the endorsement of the Financial Stability Board’s task force on climate-related financial disclosure and the UK’s setting up of the Powering Past Coal Alliance at COP 23 all show how we are influencing discussions at global climate change meetings.
Good progress is being made, but there is more that the UK can do to be a global leader in green finance. This is an effort that requires the leadership and hard work of the Government—and, crucially, as other noble Lords have noted, the co-operation, collaboration and initiative of private business. Vital to this is recognising that sustainable business is good business. The idea that a business model that incorporates environmental and social responsibility is in conflict with financial results and the bottom line is simply a fallacy. A business that manages environmental and social issues well is a more sustainable one, even if the results take a little longer to bear fruit. Businesses and banks have much to gain from the growth in the market for renewables and from reducing their exposure to the risks associated with lending for fossil fuels.
Sustainability starts with transparency. There must be a culture change in financial reporting methods so that companies disclose to shareholders and investors the full extent of their carbon footprint and how they are working to reduce it. This was the recommendation of the Financial Stability Board of the G20 last year. I am proud to say that the Church Commissioners were  recently successful in passing a shareholders’ resolution asking the oil giant Exxon to report on how its business model will be affected by global efforts to limit the average rise in temperatures to below 2 degrees centigrade. As Christians, we in the Church recognise that humanity has a God-given responsibility for the stewardship and care of the earth and its creatures, and this is just one part of embracing that responsibility. Several of Exxon’s peers, including BP and Shell, have already followed suit, sending out a very strong signal that investors expect businesses to integrate climate change considerations into their business strategies and disclosures. Crucially, however, these disclosures are not mandatory for all companies. Will the United Kingdom Government consider introducing mandatory carbon emissions reporting for companies to ensure that investors have all the information they need?
While transparency is necessary at a basic level, we need to be much bolder than this, investing in green energy in creative, new and dynamic ways. It is an uncomfortable reality that, even if the Paris pledges are implemented in full, we will probably not keep warming below the 2 degree goal. Far more investment is needed in low carbon and other sustainable infrastructure and technologies. Once again the UK must lead the way on this and work to make the capital markets greener through good policy. There is a real need here for vision, policy stability and clarity in long-term policy objectives. Up to now, UK renewables policy has been riven by inconsistencies and some stops and starts. The Government’s recent sale of the Green Investment Bank, which might have overseen much of this innovative investment, leaves Britain without a key vehicle for supporting green projects. I find this a disappointing decision for a Government who are supposedly committed to green finance and combating climate change.
While much progress has been made in decarbonising current UK power supply, long-term decarbonisation policy for areas such as transport and housing, in particular, is far less clear. The Institutional Investors Group on Climate Change in a report in 2017, for example, recommends implementing binding regulations to ensure that all new homes and commercial buildings are near zero emissions. An encouraging step in the right direction in respect of transport was the announced intention to ban the sale of new petrol and diesel cars and vans from 2040. I will ask the Minister two questions. First, when can we expect to see clear policies for both homes and commercial properties to have zero emissions? Secondly, might the Government consider that the 2040 date for banning the sale of new petrol and diesel cars is not bold enough? Should they bring this forward to 2030?
While we must consider our investments in energy at home in the UK, we know that climate change is a global phenomenon. Therefore, we must think ambitiously and thoughtfully about our energy investments overseas, particularly in poorer and developing nations. Indeed, as we know, climate change is disproportionately impacting on the poorest and most marginalised people in the world. Not only our environmental responsibility but our social responsibility and commitment to justice call for urgent global action to ensure equitable access to enriching and sustainable development.
DfID is doing excellent work in helping people to access clean energy overseas—for example in its Energy Africa campaign, which focuses on off-grid solar energy. However, recent figures from CAFOD show that the UK Government overall are still spending more on fossil fuels than on renewable energy in developing countries. Will the Minister commit to investigating how more support can be given overseas for renewable energy and less for fossil fuels, particularly in developing nations?
As I said in my opening remarks, for our financial sector to be resilient to climate change, the impetus cannot come exclusively from a government-only initiative. It requires the collaboration and full commitment of the entire financial sector. As yet no UK bank has produced a clear transition plan for energy financing. Banks have a vital role to play in the shift to clean energy—in investments both at home and overseas—since renewable energy companies are typically more dependent than fossil fuel companies on bank financing. This is particularly true in developing countries. Yet many are complicit in using customers’ money to finance projects that are literally fuelling climate change. HSBC, for example, has provided $45 million of bank guarantees to Adaro Energy, which is one of Indonesia’s largest coal producers.
Having said this, there is reason to be hopeful, and there are some excellent examples of good practice. In 2015, Barclays participated in loan syndicates that provided more than $1.3 billion in direct project financing to six large-scale renewable projects in South Africa, including three wind farms and three solar plants. I commend Christian Aid’s Big Shift campaign, which calls on the UK’s largest high street banks to ensure that their lending practices are in line with global climate ambitions, setting ambitious and measurable targets to increase lending to renewable energy projects while decreasing loans to fossil fuel companies. Here is another excellent example of how civil society can engage with making a real difference on this issue.
Though there are clearly many opportunities to invest in large-scale renewable energy, small-scale and off-grid energy systems often make the greatest difference to poor people in rural and isolated communities by providing clean and safe energy for household cooking and lighting. In Burundi, for example—a country with which I have close links and which I regularly visit—Christian Aid, in partnership with COPED, is working on a renewable energy pilot where the by-product from processed palm oil is converted into a fertiliser from which thousands of families are benefiting. There is a pressing need to scale up financing for such small, local projects. Indeed, it will be essential that developing countries are helped at every stage to ensure that they use energy far more wisely than we, as developed nations, have done. We dare not suggest that they hold back from development as they seek to build better lives for their people—but they can be helped to avoid the major environmental mistakes that we have made on our development pathway.
While the shift in financial investment is ultimately down to the banks themselves, I would argue that the Government have a considerable role to play in encouraging this. In addition to putting in place frameworks for mandatory disclosure of carbon footprints  and other climate-related information at both individual company and portfolio level, a phasing out of fossil fuel subsidies, and ensuring that the fossil fuel industry has a limited influence in determining the price and mechanism when implementing carbon pricing, would all go a long way towards making the British financial banking sector a global leader in green finance, and resilient to climate change.
We must remember that part of being a global leader in green finance means thoughtfully using the global influence that we already have. So finally I ask the Minister: how is the UK using its influence with the World Bank and other multilateral development banks to persuade them to invest less in fossil fuels and more in renewable energy? Green finance matters for the whole world. Let us not drag our feet in any way in developing it well.

Lord Fox: My Lords, I join others in thanking my noble friend Lord Teverson for securing this debate and for proving that he is the very model of a modern eco-warrior. I will focus on two areas: resilience to climate change, and transparency; and—the Minister will not be surprised to hear—the industrial implications of this for the UK.
Starting with resilience and transparency, historically UK pension investments were dominated by fossil fuels, not least because of the position of Shell and BP in the FTSE. A managed retreat from that exposure to fossil fuels is in our interests not just societally but in terms of our pensions. Progress has been made but it should be noted that the value of local council pension fund holdings in fossil fuels has actually risen 15% to £16 billion over the past two years.
Planning and reporting decisions need to be made rationally. They need to be based on investment-grade analysis and backed by real data. London pension funds have been global leaders in pressing companies to report their exposure to climate change, as we heard from the previous speaker. We warmly support the Bank of England and its task force on climate disclosure and reporting requirements for companies because clearly, we need to do more. In that regard, does the Minister have any comments on my right honourable friend Vince Cable’s suggestion regarding reporting? He suggested that the UK should follow France’s lead in ensuring that disclosure applies both to companies and the flows of finance. That would include requiring investors to explain how their policies align with UK carbon budgets set under the Climate Change Act. As your Lordships know, transparency on sustainability, alongside transparency in financial reporting, helps investors make informed decisions.
This is a global trend and, as we have heard from other speakers, the UK benefits hugely from being an early adopter, helping to shape how the practice has developed globally. The Government can best help this by setting standards for transparency. Can the Minister reassure the House that the momentum injected into transparency by the coalition Government will not be lost over time? Reporting will also be assisted by common standards so we are looking forward to the output of the BSI, which is working closely with  industry to develop a new set of green and sustainable finance management standards. The first standard will be produced, I think, early this year, but these standards will be voluntary. Can the Minister confirm that once the standards have emerged, the Government will put their weight behind getting business and other areas to adopt them? Without a standard approach, comparison becomes very difficult.
Turning to the industrial implications of this sector in the UK, as the Minister knows, importantly, the Government’s published industrial strategy includes a clean growth strategy. Clean technology must be an important element of our future industrial strategy. BEIS estimates that clean tech already employs about 430,000 people in the UK and is growing at double-digit rates. The very existence of the clean growth strategy is itself positive and we welcome it. Clean energy entrepreneurs have long felt that they were fighting for recognition. This starts that process. The Government have firmly stated that this industry is not a niche and that the clean economy is an important growth area for the UK economy. We welcome that.
Of course, the challenge is what happens next. This is a very broad sector that operates at many scales. It covers everything from a neighbourhood scheme to insulate homes, to a £1 billion offshore wind farm. Can the Minister perhaps devote some of his time to explaining the way in which the Government’s industrial strategy will vary across these different opportunities? Of course, progress turns not just on government but on access to finance, and we have heard strong interventions today from other speakers. Yet the UK’s Green Investment Bank—GIB—has been sold to Macquarie. Before the sale, GIB demonstrated the benefits of building a centre of expertise in green finance. My party regrets what we see as an ideological sale. While there are other games in town for those seeking finance, the Government must now further free things up, in particular by changing—as my noble friend, I think, pointed out—the fiduciary duties of owners of pension funds.
Place was another important, and very welcome, aspect of the industrial strategy. In that regard, the existing clean-tech industry is more geographically spread than many other industries: it is helping to rebalance some of the industrial activity around the United Kingdom. Much of this industry serves local people and is inherently distributed across the country, so it serves the “place” part of the industrial strategy agenda to continue to encourage it. In addition, the Government now plan local industrial strategies. Can the Minister say how these will incorporate the green element?
Funding for smaller projects is still a challenge. With the sale of GIB, we lost an organisation dedicated to this sector. It was, I repeat, wrong for it to be sold. We now need the Minister to explain how the Government will encourage more microfinance for the smaller, more locally based projects around the country. Perhaps the Government should also commit to allowing local authorities to borrow for green infrastructure improvements related to energy saving or other green elements.
I turn to business investment. Many businesses perhaps choose to spend capital on new plant, rather than fixing some of the environmental needs of their sites. The Government can do more on messaging the importance of efficiency—in the energy or environmental sense—to leverage higher productivity, and they can look at taxation. Will the Minister undertake to speak to Treasury colleagues about how tax can be further used to drive green investment in our industry?
Worryingly, the UK is becoming a less attractive destination for green investment. For example, the EY—formerly Ernst & Young—index measuring countries’ attractiveness to energy investment saw the UK fall from fourth place in 2013 to 10th place in 2017. Can the Minister tell the House how he intends to reverse this negative trend?
I expect that the Minister will mention the Government’s green finance task force, as have other noble Lords. We welcome it, but my understanding is that it will meet three times and disband after six months. Can the Minister confirm that and, if it is true, say what he hopes to get from such an ephemeral gathering?
Clean energy forms a significant part of green finance. Energy is complex, as the Minister knows. Heat, transport and power are inextricably linked. Any action on one element has a reaction elsewhere. Energy is badly served by decisions taken on political instinct or to grab headlines. Energy investments are long term, requiring investors to consider future policy for several Parliaments to come—often more than several. We need stable policy, developed collaboratively across the whole industry.
A clear pipeline of future work is the best environment for clean investment. Businesses that see a future market will invest in technology, facilities and the skills of their people. That helps bring costs down and hastens the transition to a clean economy. Furthermore, it will unlock the clean finance we need.
To conclude, the UK led the way on resilience and reporting. It has built great expertise in investing around the world, as we have heard from other speakers. As this debate reveals, there is cause for positive thoughts, but overall there can be no backsliding: it is a competitive world. Most of the success outlined here today is a result of decisions taken five or 10 years ago. We need to know that this Government understand today’s challenges and opportunities. I call on the Minister to convince us that he has that understanding.

Lord Dykes: My Lords, it is a great pleasure to follow the wise words of the noble Lord, Lord Fox. He is well known to be an expert on this subject. Indeed, to have four Members from the Liberal Democrat group speaking on this subject today, out of a total of nine or 10 for the whole debate, is an impressive total. It shows the expertise in that group on this subject. I deliberately thank the noble Lord, Lord Teverson, for his excellent contribution—I hope not to embarrass him by praising him too much—in opening and taking the initiative on this debate. It is such an important subject.
The expertise shown so far includes the very interesting speech of the noble Lord, Lord Barker of Battle. I agreed with him so much and he indicated, quite rightly, that the Government are now committed to this whole matter, whereas there were signs a few years ago that they were perhaps a bit slow in responding. The exception to that expertise in all the speeches so far is that now the quality goes down, because I am not the expert. I deliberately do not have a written text today because I want to pick up some of the points that came through in the debate. I prefer that because it becomes more of a real debate rather than just a series of conference speeches made on machine tools, following one after another.
I mention the noble Lord, Lord Teverson, again because, in addition to his expertise, there is what he did during his long and distinguished chairmanship of the committee on this subject. We first met when he was Chief Whip for the Lib Dem section in the European Parliament. He has focused on this as one of his leading subjects and we are grateful for that. I hope your Lordships in this debate will forgive me if I mention again a terrible joke—I have not used it for a long, long time. Many years ago there was a human cannonball in a circus in Britain who was injured in an accident. Fortunately, it was not a serious injury but the ringmaster wrung his hands in grief and said, “It’ll take us a long time to find another man of the same calibre”. I am embarrassing the noble Lord by insisting that there is a link from that to the quality of his contribution but it is true, and we thank him and the other noble Lords who have spoken in this debate.
The noble Lord, Lord Fox, was right to question whether there are still areas of complacency around this subject. Those areas are found in some governmental circles. I do not include the Minister who will reply today; I am sure he is fully committed, psychologically and in detail, to this new policy that the Government are developing for the sake of this country and our friends in the rest of the world. But there is still a problem with these matters, which I noticed was indicated even today in two contrasting points in the press. I refer to the quality newspapers—I include the Times in that, which I hope is not incorrect and rash.
The first article I should like to mention was on page 6 of the Guardian today. It referred to how much damage was being done, in Europe and Britain, by the huge increase in the purchase and use of microwave ovens. The figure given was that it was the equivalent of 7 million cars unloading carbon dioxide into the atmosphere. The article went on to say that this trend in the sales of microwave ovens has become a brand-new feature of modern life in households in the European Union and here, as opposed to the old, traditional oven, which is still used in some circumstances. That it is now a major threat and causing serious concern in those expert circles which follow these trends.
In contrast, however, on page 6 of the Times today there was an interesting reference to a study published in the journal Nature, which,
“refines previous estimates of how sensitive the climate is to carbon dioxide by considering the historical variability in global temperature. It focuses on the key measure, known as equilibrium climate sensitivity (ECS), which is used by climate scientists to  
The suggestion of this study—again, I quote from paragraph 2 of the newspaper article—is that,
“the target set in the Paris Agreement on climate change of limiting the average temperature increase to well below 2C is more achievable than some scientists have claimed”.
That is welcome news indeed, although, as someone has mentioned, there is a stricter target for island territories. That has, I hope, focused on reassuring people that this is a serious programme between countries and internationally, and between allies and friends and within the European Union—of which we are still, thank goodness, a member—and that we are now co-operating, following the lead in Paris. I live in France as well, and I remember, when the green sovereign French bond was launched, how excited people in France were by that first achievement. I echo the views of others in this debate who urged us to go down the same route. I hope the Minister will deal with that subject today.
Therefore, not all is depressing, but equally, not all is very reassuring in the total picture. I very much agree with the noble Lord, Lord Fox, when he said what a great mistake it was to sell the Green Investment Bank in that way. I think we will come to regret that later. As far as I know, the aim is really the usual fund-raising by the UK Treasury, which is, sadly, not known for its skilful management of the British economy over many decades. That is the trouble with the emphasis that we keep making. Of course, debt and debt governance for all Governments in the western world and elsewhere is a major preoccupation. I understand that.
If you take the US figures, they are now so high and unsustainable, but cannot in any way be reduced practically, that you end up feeling in despair when you think of what it is trying to do. I agree that the US is doing some things on the green investment strategy front, but it does not have enough resources. The United States defence budget is 10 times the size of Russia’s. There is not much green consequence or result in that defence spending in the United States and overseas. Another reason for us to work with our European partners on these matters is the EIB, which has been mentioned by a number of speakers. I agree entirely that it is important for us to continue that relationship if we can. I personally think that we should eventually reverse the decision to leave the EU through a democratic vote, in whatever form it might take. The whole thing is a nightmare proposition and more and more members of the British public will come to realise that.
About six years ago, we were all avidly reading the book The Burning Question by two very eminent scientists. The message there was to keep fossil fuels in the ground. That is a tall ask for the practical exigencies of the international, commercial and economic community and energy companies, but it is none the less something that should be our target for the future. We now have the good side of things developing: wind power, electric cars, solar panels and the rest of it. However, is it enough if the Government do not take the lead, as elsewhere, and with our EU partners in  promoting these objectives? I thank the right reverend Prelate for his very important remarks: they showed his remarkable expertise on this subject. We are grateful for what the Church has been doing. We look forward to the Minister’s reply—with his history of many portfolios over the years and his skills and abilities—to give us a reassuring answer in this important debate today.

Baroness Featherstone: My Lords, I congratulate my noble friend Lord Teverson on securing this debate. I usually stand here to warn that the Government are not going far enough or fast enough—they are not—to deliver our emission reductions commitments from the Paris Agreement and the Climate Change Act. However, today’s debate is really about the economic opportunities of the low-carbon economy and the low-carbon world. We have the opportunity to make the UK the green and sustainable investment capital of the world, but only if we move swiftly and take the right actions. There will be, and already is, fierce competition from other countries to lead and capitalise on this agenda, so we need to move decidedly; we need to signal to the world that we are serious, not half-hearted, not little and late, but bold and courageous if we are going to capture this market.
The potential—as we heard from many sides of the House—for green finance is huge: trillions over the next decade. It is easy to see how, within a few short years, every listed company on the planet will face calls from shareholders to explain how they plan to adjust to a decarbonising economy and escalating climate risks.
With a rising population pursuing higher levels of wealth on a finite planet, green and sustainable investments should facilitate the transition to a more sustainable economy and avoid many of the risks associated with transition. If we do nothing to create a sustainable future, we stand to lose out through enormous shocks to our economy and financial system, and then, as other noble Lords have said, there is Brexit. Sir Vince Cable, in a recent op ed for City A.M., said:
“The prospect of Brexit threatens to cause serious damage to the UK’s financial services industry. Paris, Frankfurt, Dublin and even Luxembourg are all circling like hungry jackals waiting to pick off the weakest members of the herd. London will need to develop a distinctive and competitive offer to investors. I believe we can find it … in the expanding world of green finance”.
I think noble Lords on all sides of the House agree.
The financial system is there to serve the real economy which, in turn, is there to help society thrive. We do not have the green, zero-carbon economy today that society needs, so we also do not have a green financial system channelling capital towards it. Both those things need correcting at the same time to secure progress. The financial system is just that: a system. It has multiple actors, all of whom have different incentives and roles to play. Therefore, action needs to be taken across the whole system. To categorise broadly the interventions that are needed, they are those that relate to the supply of capital; the demand for capital; and the connective tissue between supply and demand. Across all three categories, we have to ensure that the financial system is resilient, both to huge environmental  change and the economic change necessary to avert it, and that we redirect capital towards activities compatible with a zero-carbon economy.
We heard from my noble friends Lord Teverson, Lady Kramer and Lord Fox on the supply of capital. All those with professional responsibilities for governing institutional pots of money on behalf of others—for example, pension fund trustees—have fiduciary duties and must take seriously climate risk and the changing economics of things such as renewable energy. Regulation can require this, training can support it and government-run pots of money can set the example. Doing so will result in large sums of money seeking green. Banks should be supervised using existing prudential regulatory powers so that we are confident that they are taking seriously the financial risks of climate change or a failure to transition quickly enough. Doing so will result in more bank capital seeking green. Insurers should be empowered to be a go-to source of investment in zero-carbon infrastructure. They have to find long-term investments to match their long-term liabilities, and they have a clear vested interest in bringing down overall levels of climate risk. If zero-carbon infrastructure investment cannot work for them, who can it work for?
As we heard from my noble friend Lady Kramer, the investing public are often forgotten, yet they are the customers of the above institutions and the citizens who stand to thrive or struggle in a green climate-changed world. The average saver or investor is quite open to doing good with their money, but the system they put money into cannot answer the most basic of questions: what environmental impact is my money having? The public have to be able to access this information and the investment advice related to it as a matter of course. If necessary, government savings products for the public should surely kick-start the market for simple, impactful financial products.
There is also demand for capital. As we heard from my noble friend Lord Fox, the Government have issued their clean growth strategy, but investors remain pretty unclear about where their capital can be put to best use to help deliver it. What about clean growth investment plans by the Government and industry to start focusing investor attention on the biggest needs? There are significant, but often overlooked, regional or local agendas here. Clean, zero-carbon infrastructure is needed right across the UK, and very often local authorities and councils could be playing a catalytic role in attracting green finance from the private sector. However, their knowledge and skills as to how to do so are lacking, so what about building capacity to issue clean growth investment plans for particular regions or green bonds for cities and regions? Indeed, the sovereign bond would not go amiss either.
Finance flows mostly in rational directions—mostly. As was mentioned by the right reverend Prelate, we still have a raft of perverse subsidies, for instance fossil fuel subsidies, which make it economically sensible for money to flow into exactly the kind of activities that we are trying to wean ourselves off. The debate about needing to see an end to renewable subsidies always misses this point, yet it is a huge distortion in the market.
Then there is the connective tissue of data. Data has a transformative impact on how capital is deployed. The whole success of the green bonds market—tiny but growing—arguably boils down to just one difference between a conventional bond and a green bond: data, specifically data about how the proceeds of the bond will be used for green. Making that data available to investors has revealed enormous demand, and since demand is so often outstripping supply, issuers of green bonds are now seeing material pricing benefits in their favour.
The TCFD, the Task Force on Climate-related Financial Disclosures—it trips off the tongue, that one—plays directly into the data agenda. Disclosure must be mandatory, as we have heard from several speakers today, and as advised by Aviva, the insurance giant. It must be made mandatory as soon and as smoothly as possible, and feed into all relevant existing disclosure legislation. If we get that right, the expertise we will accrue will be exportable as a service.
As for green fintech: digital technologies are transforming how financial services are delivered. If we think peer-to-peer platforms and payment systems like PayPal right through to blockchain—add in machine learning and big data analysis techniques—digital technologies are a formidable force. For green finance, they can be used to get massive amounts of data on green into the financial system, at scale and at low cost, allowing investors to differentiate between green and brown in whole new ways.
The digital revolution can make the financial system more accessible and accountable to consumers. Green fintech is a nascent area, but the UK has powerful strengths in fintech, green finance and innovation. We have such a huge opportunity to lead the world in this area, and the Government should be looking for ways to spur that market innovation.
We have had an excellent debate; I want to touch on a few of the points that have been made. The speech of the “reliable eco-warrior” behind me was a tour de force. He emphasised that all finance is really green finance and that it is win-win for the climate and the economy. I suppose if you boiled that down you would say, “We can save the planet and make money”. He also reiterated the point about mandatory reporting. My noble friend Lady Kramer talked about the size of the green bond market and how we need to educate and pump-prime new financial instruments. She advocated a green sovereign bond. She said that we need to educate the public that financial literacy is a must. She also talked of green mortgages and the verifying of the verifiers. The right reverend Prelate reminded us of the Christian commitment to the stewardship of our planet. I think it is a favourite saying of the noble Lord, Lord Mountevans, that business is playing its part in addressing climate change; it is an opportunity for business to show its green credentials. My noble friend Lord Fox talked of resilience and transparency, and said we needed to set the standards of transparency. He lamented, as do many on our side and, I am sure, others, the loss of the Green Investment Bank. That is one of the stupid things that we in this country do: develop something brilliant and then sell it off.
I shall touch briefly on divestments, which I was hoping would be covered by someone else. Divestment is moving hugely in this country. When New York moves, the World Bank moves, Aviva moves, the Dutch bank ING moves, Norway’s sovereign fund and Black Rock move—they all get this. There is a huge and growing reputational, financial and operational risk that Governments and investments are associating with fossil-fuel assets. They are going to become stranded assets at the same time that it is becoming clear that the economy will become low carbon.
Happily, we do not need to reinvent the wheel but we need to ensure that we are ahead of the curve. We have the European Commission high-level expert group recommendations, the Prudential Regulation Authority’s initial report on the impacts of climate change for the UK’s insurance sector, the UNEP inquiry into the design of a sustainable financial system, the Environmental Audit Committee inquiry into green finance and the conclusions of the financial stability task force on climate-related financial disclosures, and in March we will have the recommendations of the Government’s green finance task force. So we are not lacking in advice, but what we need is strong action. I am looking forward to hearing from the Minister. I hope he is going to say that the Government will act with urgency, clarity and boldness. If we want this market, there really is no time to lose.

Lord Mendelsohn: My Lords, I thank the noble Lord, Lord Teverson, for securing the debate. It has been useful and constructive, and I look forward to hearing the Minister respond in kind to some very useful suggestions. I pay tribute to the noble Lord, Lord Teverson, who has done an outstanding job in these areas. I thank him for the unpaid role that he plays as a trustee of the Green Purposes Company, and I thank all his colleagues for the work they do. It is a very important role and we are very grateful to them.
Like others, I noticed that the noble Lord bristles when he is described as a reliable eco-warrior. I certainly think that he is very reliable and, having worked with him on the Green Investment Bank, I think he is also exceptionally constructive, as was his tone in his remarkable tour d’horizon. He raised an important issue that I shall just pick up: the risks involved for the insurance industry in the grand challenge of climate change. No one should underestimate how significant they are. There has indeed been a fourfold increase but the velocity of that increase is changing rapidly and we have to be very conscious of that.
I was very moved by the enthusiasm of the noble Lord, Lord Barker, particularly his phrase that the Government have regained their mojo; that is an important point to make and it is certainly true. We welcome the green finance task force, the City of London green finance leadership group and many other important initiatives that are now starting to take place. Like many others, I regret what happened to the Green Investment Bank. All that did was to take £1.6 billion off the Government’s debt figure. That was an overriding requirement of the transaction but it yielded only £120 million. That was not the deal that I would have  done. I declare my interest as having a corporate finance business. Nevertheless, we are where we are, we have to move on and at least there is some enthusiasm to do so.
We do this in the context not just of enthusiasm but of the fact that there has been a downturn, and there are worrying signs of a reduction in investment, as noted by the noble Lords, Lord Teverson and Lord Fox. There are some opportunities available to the UK because we have an excellent outstanding financial centre. Certainly, in the shadow of Brexit, we have to work doubly hard to maximise any opportunities that we have, and during this debate we have heard many interesting and useful suggestions. In introducing the debate, the noble Lord, Lord Teverson, made a crucial point about how we in the UK remain a global leader in green finance. The watchword for this has to be how we ensure leadership.
I want to talk about green finance in a slightly wider context. Many of the contributions have strayed into broader areas—the noble Baroness, Lady Featherstone, made an excellent and quite wide-ranging speech on a number of areas. However, this is not just about a market opportunity. There is an unprecedented availability and uptake of solutions, particularly on treatment and on renewable energy generation and storage. In many ways you could identify that as the largest business opportunity in the world at this time, but it is also a market requirement. Sustainable capitalism, long-term capitalism, inclusive capitalism—however you wish to describe it, it is now a much more important requirement for the world at large. This is about promoting an economic system within which business and capital seek to maximise long-term value creation, and about accounting for material, environmental, social and governance issues. Integral to this framework is the consideration of all costs and benefits regardless of whether they are currently attributed with an economic cost by society.
This sort of sustainable investing is an investment philosophy and approach that allocates capital to companies aligned with these principles, and uses analysis and metrics to do it. Indeed, it seeks a competitive market rate return. It does not compromise financial returns for sustainable outcomes, or the reverse. It applies to the entire investment value chain. This is the way the world is moving—for very good reasons. That reflects not just the requirements of green areas but of all society’s impacts; it also reflects confidence in the private sector itself.
There are many advantages to take, and we have many goals in policy terms. That is not just about the transition to a low-carbon economy, or about more business models leveraging technology that improves asset utilisation, thus conserving resources and other things. It is not just about the maturing field of sustainable finance, but also about a shift in behaviours and attitudes towards sustainability between generations, with more enthusiasm and commitment towards such issues from the millennial generation and the centennials. Indeed, we face the challenge behind that often-quoted phrase, that the future belongs to those who give the next generation reasons for hope—and we have to do that.
This all bleeds into issues around corporate governance, because asset owners, managers and companies need to adopt a more holistic definition of fiduciary duty—one that incorporates sustainability and shapes investment frameworks as a result. We also need to encourage wider consumer behaviours and consciousness of these issues, even to the point of considering how our pension plan might incorporate sustainability as a key consideration, and how we can become more aware of all the consequences of our purchasing decisions. Investors, businesses and consumers alike are now equipped with the economic case for action, and the information on which to take that action.
The Paris Agreement provides a key opportunity, which has led to many calculations of the overall requirements globally. The International Finance Corporation has suggested that $23 trillion of global investment will be needed between 2016 and 2030, and I think that our Government have identified $13.5 trillion in investment in energy alone. We must energise all forms of economic activity and finance.
I shall focus on one or two particular aspects, to try to illustrate some of the challenges. It is important to establish global standards. This is not something that affects the UK alone. The lack of agreed global standards for what qualifies as a green project is fraught with many problems. For example, let me illustrate one of the challenges in the nascent area of green bonds—the crucial point at which climate issues directly meet the financial markets.
Green bonds are a fixed-income instrument used to further the green agenda. This asset class has grown dramatically, and there was more than £100 billion of issuance last year, compared with a minuscule amount only a few years ago. The momentum is extraordinary—yet there is no binding definition of “green”. There is no legal perspective in the European economies as to what constitutes such a bond. There has been a vacuum, filled by some principles from NGOs and industry groups such as the International Capital Market Association, which has a list of acceptable use of proceeds. But there is a glaring lack of an acceptable legal definition. This is not the case globally—China has a legal definition—but we need much more co-operation to create our own in Europe, and a more accepted global standard.
What can the Government do to maintain leadership? We are seeing from around the world what can be done to support growth in green finance. The European Commission has this month indicated support for regulatory incentives that would encourage banks to shift their balance sheets in a green direction, by allowing them to take on more leverage against assets with a positive environmental impact. France last year became the largest sovereign issuer of green bonds, raising €7 billion to fund energy transition. There are other illustrations as well.
We must not miss this opportunity, because the appetite is clearly there. In September a €600-million bond sold by SSE became the largest bond with a green label attached so far issued by a UK company, with the funds being used to finance onshore wind farms. As has been stated before, Barclays sold the first green bond from a UK financial institution linked  to assets in the UK. But there is an issue about how some of our rivals are dealing with these opportunities. This is an important challenge for the City of London, and the noble Lord who has had such a distinguished career in the City made a very useful contribution.
Earlier this month, Fromageries Bel, the French multinational cheesemaker perhaps best known for the brand Mini Babybel, extended a credit agreement with a group of banks, comprising a €520 million revolving credit facility made up of a consortium of banks, including Société Générale, BNP Paribas, Crédit Agricole, Commerce Bank, KBC Bank and a few others. It is interesting that this renewed credit agreement includes environmental and social impact criteria linked to the company’s sustainable development strategy. It is a pioneering credit facility tying a credit line to environmental and social performance. These sorts of challenges have been taken up round the world and to maintain our leadership position we have to do more.
We are starting to promote electric vehicles. The right reverend Prelate the Bishop of Durham talked about sales of petrol and diesel vehicles ending by 2040. We have a massive issue with millions of lithium-ion batteries that will need to be recycled or reused each year, as required by existing law. Indeed, we have no such facility in the UK and we have to think about what our requirements will be over time. Perhaps in this area we can show that we have moved on and adopt a more collaborative approach to the way in which the market might be encouraged or supported to meet that challenge within the context of the industrial strategy or other initiatives. The Government take the view that this issue will be for the market to determine. The consensus in the Chamber for more progress, and more co-operation to achieve it, was adequately reflected in the debate. I hope that the Minister will respond in kind.

Lord Henley: My Lords, I will leave lithium batteries and the recycling thereof for another day. I hope that the noble Lord, Lord Mendelsohn, will be prepared to accept a letter on that slightly more detailed subject than the broader themes with which we have engaged in this debate.
I join other noble Lords in congratulating the noble Lord, Lord Teverson, on securing this debate and introducing it. I join my sometime noble friend, the noble Lord, Lord Dykes—I suppose that is how I should address him—in congratulating his sometime noble friends on the Liberal Benches on the extraordinary contributions of the colleagues of the noble Lord, Lord Teverson—the former colleagues of the noble Lord, Lord Dykes—in producing four speakers in this debate. As my noble friend Lord Barker implied, we achieved much during the coalition years. I particularly remember undertaking with my noble friend a great deal of work on anaerobic digestion, the energy that can come from that and the successful removal of waste from the waste stream as a result. It is a minor point but it was very important in terms of recycling and green energy. The coalition achieved much and I  hope that in what I will say I can convince noble Lords who were formerly noble friends—I refer particularly to the noble Baroness, Lady Featherstone, with whom I served on the coalition—that we will continue to achieve those results, no doubt with them prodding us along, as we continue not with a coalition Government but with a Conservative one.
I welcome all the contributions we have had on this important agenda. I congratulate noble Lords on the Liberal Democrat Benches on their recent report on a clean, green and carbon-free Britain. The noble Lord, Lord Teverson, and, I think, other noble Lords referred to the recent City of London report and the FSB’s report. I give an assurance that we will look very carefully at those.
Only a week ago, the noble Lords, Lord Mountevans, Lord Mendelsohn and others, debated our industrial strategy, which sets out how the United Kingdom will build on its strengths and maintain its global leadership in a fast-changing world. The industrial strategy recognises clean growth as a great opportunity that we must pursue. As the noble Lord, Lord Fox, will remember, we set out our clean growth strategy earlier than the industrial strategy, but the industrial strategy made it clear that, of the four “grand challenges”, clean growth was one of the main ones. It is a challenge facing us and all the major economies in the world—and the minor economies, for that matter.
Our clean growth strategy demonstrates that it is entirely possible to grow our economy while cutting emissions. Indeed, in 2016 the United Kingdom’s emissions were 42% lower than in 1990, while GDP increased by 67% over the same period. To all those Jeremiahs who say that you cannot have a reduction in emissions and GDP growth in the same period, the figures for this country show that that is not the case. Furthermore, PwC recently published a report that showed that the United Kingdom’s average annual reduction in carbon intensity over the past 16 years has been greater than that of any other G20 nation.
That global transition towards green growth cannot happen without our financial sector, which is the main subject of the debate today. The pursuit of cleaner growth implies a great change in the way we invest, from households to large institutions. All investments and purchases are relevant. In the last 10 years, for example, we have seen global green bond issuance grow from zero to reach more than £100 billion last year. I believe that we are already a global leader in green finance, and the Government entirely agree with the strong case for the United Kingdom to remain so and for our whole economy to be resilient to climate change, which is the second of the noble Lord’s debate Motion. If I can frame it as two questions, the first is the need to remain a global leader and the second is the need to ensure the resilience of the economy to climate change. Our industrial strategy and our clean growth strategy set out the ambitious first steps that we have taken to ensure not only that the United Kingdom captures this opportunity but that we will remain the leading standard-setter in the sector as it develops.
The United Kingdom is widely recognised as a global financial powerhouse. In the Global Financial Centres Index, London has been rated as the top financial centre in the world since 2015. It might be that the Leader of the Liberal Democrat Party does not think that the City should have quite such dominant power, but most of us welcome it and are grateful that it is so successful and provides so many jobs and funds for the Exchequer to pay for the services that the Government needs to provide. It is only natural that the United Kingdom is well placed to build on our global leadership in green finance, which is what we want to do. It is an important part of the United Kingdom’s leadership in tackling climate change. I assure the right reverend Prelate and others that we want to show leadership in tackling climate change, because green finance matters to both the financial and climate change agendas, domestically and internationally. I assure noble Lords that government work on green finance does not take place solely within the Department for Business, Energy and Industrial Strategy, which I have the honour to represent here.
On the international stage, the Bank of England is co-chairing the G20 sustainable finance study group with China, and government as a whole has established formal green finance partnerships with Brazil and China. Domestically, BEIS and the Treasury both work in close collaboration on green finance, and at official level the work has received support from 11 different departments so far.
We have also seen significant leadership on green finance from the private sector. Barclays recently listed a €500 million green bond and HSBC committed to provide $100 billion of financing and investment to develop low-carbon technologies and projects. The London Stock Exchange has attracted more than 60 green bond listings, raising over $20 billion in seven different currencies. We want to do all we can to encourage the profitability of green finance. I reassure the right reverend Prelate that we want London to be the leader of that. Indeed, as that famous Londoner, the great lexicographer Dr Johnson, so eloquently put it many years ago:
“There are few ways in which a man can be more innocently employed than in getting money”.
We want the City to continue to do that in green finance as well.
As such, BEIS and the Treasury have jointly established an industry-led United Kingdom green finance task force. That was welcomed by the noble Lord, Lord Teverson, and I am grateful for that. I am also grateful to my noble friend Lord Barker, who, also describing himself as an optimist, welcomed that task force, which will develop long-term, ambitious policies in close collaboration with the private sector. The task force brings together senior leaders from across the financial sector, including representatives from big banks such as HSBC, Barclays, Aviva, the London Stock Exchange and the Bank of England. It has already consulted over 100 stakeholders and will publish its final report in the spring, providing green finance recommendations for the Government to consider.
On Tuesday, three of those UK green finance task force members gave evidence to the Environmental Audit Committee. I have not yet seen the detailed  transcript but I look forward to it, as I imagine do other noble Lords. However, I understand that the task force was discussed, among other issues, and that those members were supportive of our green finance work. I very much hope that the noble Lord, Lord Teverson, who referred to the recent news of the sharp drop in investment in renewable infrastructure in the Bloomberg report, will accept that our support for clean energy has led to dramatic falls in the costs of renewable technologies—which, again, my noble friend Lord Barker referred to—and will accept that the UK green finance task force will look at ways in which the Government can facilitate investment in further low-carbon deals.
That brings me to just one or two of the questions at this stage which were raised. The noble Lord, Lord Teverson, was looking for more retail products; again, we would like the green finance task force to look at this issue and at lending for both households and businesses. We hope to see the sector itself develop new products—green bonds, for example—in the near future. But again, we are looking for advice on that.
The noble Baroness, Lady Kramer, asked what the Government would be doing on green mortgages. In our green growth strategy we committed to working with mortgage lenders to develop more products in that field. We published a call for evidence alongside the green growth strategy, seeking views on proposals for supporting more products of that sort, particularly green mortgages. That can be looked at by the task force.
The noble Lords, Lord Teverson and Lord Mountevans, referred to Fifteen Steps to Green Finance published by the Green Finance Initiative in association with E3G. Did the noble Lord, Lord Mountevans, say he was at the launch or perhaps it was at the creation of the Green Finance Initiative? He will correct me, no doubt, in due course if I have got that wrong. Both work as part of the green finance task force. We will certainly want to work closely with them.
The noble Lord, Lord Mountevans, and the noble Baroness, Lady Kramer, mentioned the sovereign green bond. We support the United Kingdom issuance of green bonds and the London Stock Exchange listing of those 60 or so green bonds to date, but for the Government to go down that route we would really have to show that they were cost-effective to the taxpayer. However, nothing is ruled out and it is something that can be looked at in the future.
I move on now to the sale of the Green Investment Bank, which the noble Lords, Lord Fox and Lord Dykes, and the noble Baroness, Lady Featherstone, very much regretted. We want to help the private sector build on its strengths and drive the development of the green finance sector. The core objective of the Green Investment Bank was to mobilise greater private sector green investment. It was a profitable sale—even the noble Lord, Lord Mendelsohn, admitted it was profitable but not as profitable as if he had sold it himself—and demonstrated the bank’s success in acting as a commercial entity and the case for green investment.
Under public ownership the Green Investment Group leveraged some £2.50 of third-party investment for every £1 it invested. Macquarie, the purchaser, has  committed to maintain the Green Investment Group’s green values as part of its successful bid and a successful share has been established to safeguard the Green Investment Group’s green purposes.
The noble Lord, Lord Teverson, referred to his role as one of the independent trustees. We are very grateful for the work he has taken on and I am sure he will perform it with extraordinary diligence. I, like the noble Lord, Lord Mendelsohn, regret that he is unpaid for that but I do not think it will affect his excellent work in any way and the key role that he has played in the development of that special share, particularly now that he is one of the independent trustees.
The GIG continues to demonstrate leadership in the green sector. For example, it recently launched a ground-breaking pay-as-you-save energy efficiency service with no up-front costs for medium and large energy consumers in the United Kingdom. It is taking a proactive role in the green finance task force and has already made a number of significant green investments.
I did not think I would get through the debate without Brexit coming through. My noble friend Lady Featherstone questioned what might happen with Brexit and sought assurance on the implications. As we proceed to the exit, the Government will continue to utilise our entire global network to promote the UK as a destination to invest in, and as we move to the second phase of negotiations we will certainly explore our future relationship with EU bodies such as the European Investment Bank. At the Autumn Budget, the Government also set up a new dedicated subsidiary of the British Business Bank to become a leading UK-based investor in patient capital across the UK. That new subsidiary will be capitalised with £2.5 billion, which further complements the Government’s recent announcement of investing £2.5 billion in low carbon innovation from 2015 to 2021.
In the last minute or two that I have, I will briefly touch on the resilience of the financial sector to climate change. The noble Lord, Lord Teverson, rightly noted the importance—as well as building on the UK’s global leadership in green finance—of ensuring that the UK financial sector is resilient. The Government already work with the insurance industry on physical risk, as mentioned by many noble Lords. My noble friend Lord Barker referred to the excellent work done by my right honourable friend Michael Gove at Defra through its Flood Re scheme, which works with insurers to help provide householders at the highest flood risk with affordable insurance. We are particularly interested in that, given recent disasters in the north-west. We continue to demonstrate this global leadership through DFID’s recent establishment of the Centre for Global Disaster Protection.
In the time available to me, I will not be able to give this part of the noble Lord’s debate the coverage it deserves. I hope that he and others are happy for me to write to them in greater detail, particularly on some of the recommendations we have received from the Task Force on Climate-related Financial Disclosures—very important recommendations indeed that need to be dealt with. Since I have now used up my 20 minutes, I very much hope that the noble Lord will accept a letter on that.
We share the desire of the noble Lord, Lord Teverson, and his party that the United Kingdom offer its leadership in this area. Through our clean growth strategy and our industrial strategy, we have put in place the tools to enable us to do so. We will continue to work collaboratively within government across all departments and all parties, and we welcome the occasional prod from our former colleagues in coalition on this issue. We also hope for further prods from the private sector and others to ensure that we effectively build on the UK’s strengths in green finance.

Lord Teverson: My Lords, I thank the Minister for his response. It is last business on Thursday so I will obviously need to be brief. To put this beyond doubt, I should say that I and my fellow eco-warriors feel it entirely appropriate that we are not remunerated as trustees of the Green Purposes Company.
I pay tribute to the noble Lord, Lord Barker, for his work over many years on distributed energy and the work he did in the coalition. The Minister is right: we worked very well together in this whole subject area as part of the coalition. The enemy was the Treasury, but I suspect that that is government, whether in coalition or not.
I congratulate the noble Lord, Lord Mountevans, on having achieved this Green Finance Initiative and the report Fifteen Steps to Green Finance. It is eminently readable and sensible and is a superb agenda that a  Government of whatever colour should be able to deliver. My noble friend Lady Kramer drilled down and offered challenges. The right reverend Prelate spoke about social responsibility and particularly the role of DfID, which I did not mention but is incredibly important. The noble Lord, Lord Fox, talked about transparency. I do not know what I can say to the noble Lord, Lord Dykes. I think that microwaves are pretty efficient. Unfortunately the real enemies are probably people like me who are Aga owners—I think we are the real enemies of megawatt hours when it comes to preparing food. I also thank the Front-Bench spokespeople, particularly my noble friend Lady Featherstone, and of course the noble Lord, Lord Mendelsohn, for his usual insights. Of course, they have to be here, given the weighty positions they hold as Front-Bench spokespeople.
I say again to the Minister and to the Government: catch this wave. There is that opportunity: it is a sweet moment, so let us get on and do it. I have one disappointment, but I recognise that the noble Lord is not a Treasury Minister. The one thing we could and should do to lay down a marker as a nation—as the City—is to have a green sovereign bond. If we do not, we are saying we are out of this important market, so I ask the noble Lord to take that back and discuss it further with his Treasury colleagues.
I thank all your Lordships for your contributions.
Motion agreed.
House adjourned at 5.41 pm.